You are a small business owner and you have no intention of selling your business, at least not for several years. Still, there are a number of things you can do now to set yourself up for a successful sale once the time comes when you do decide to sell. After all, the key to successfully selling your business does not rest solely on luck (although, sometimes a bit of it is involved). Rather, it takes ample planning, hard work and strategy.
So, what should you be doing now to build a sellable small business? Think about what's important from the buyer's perspective. Consider these characteristics that, if attractive to a buyer, will help you yield the best results when your business is eventually listed for sale.
1. Recurring Revenue - Just as recurring revenue is important to you as the business owner, it's also important to a potential buyer. Consistent revenue streams justify paying a higher price.
2. Consistent Profitability - A track record of consistent profitability demonstrates the strength of your business and shows potential a buyer, who most likely will live off the profit as most business owners do, that they can rely on the strength of the business
3. Branding - A brand is an asset that can pay dividends when you are ready to sell your business, but realize, strong brands do not appear overnight. It takes time, effort and money to build your brand but if your brand dominates your target market, it is an investment worth making.
4. Physical Assets - Maintaining a portfolio of physical assets helps a buyer's ability to secure financing as assets reduce risk by providing security in the form of collateral. In other words, having physical assets is a good idea.
5. Recordkeeping - Accurate record-keeping is an important trait in a highly sellable business. If your records don't accurately reflect your business, it can lead to a breach of trust between you and a potential buyer. Having meticulous records, on the other hand, can help drive up the asking price of your business.
Building a business you can sell is not overly complicated but it does take planning, consistency and a bit of effort. To see more tips on this topic, please click here.
Tags: new business owners, small business ownership, preparing to sell your business, selling a business, selling your business