How To Make Your Business Sell-Able
At Benchmark Business Group, we have a unique range of services under one roof.
We not only provide business coaching, but also help business owners value their business and, when the day comes, list their business for sale.
This combination of building a business of value and business brokerage means we often get asked how certain outside factors will impact the value of a business.
Those factors can include changes in the economy and yes, even a pandemic.
Because we have seen too many business owners close their doors rather than have a business that is sell-able, we’re passionate about educating business owners about the drivers that determine the value of a business. Drivers that do not change, no matter what is happening with outside factors.
What makes your business sell-able during a pandemic, or when the economy changes, are the same 8 drivers that make it sell-able when everything is going great. While you cannot control outside factors, understanding the 8 drivers of value can and will help you make the most strategic decisions on how to grow your business and when to sell.
To maximize the value of your business you have to be competitive in the market. Your business needs to be sell-able. It has to be attractive to a buyer. Which means as a business owner, you need to know how potential buyers think. You need to know how they make decisions. We call this, “Putting on the Buyer’s Glasses.” And for most business owners it can be eye-opening.
The easiest comparison is to think about selling a house. Often before a house is ever listed an expert might advise you about making changes to your house to attract more buyers. Small changes like "staging" the home with furniture or re-painting your child's purple bedroom might be suggested. In some cases, bigger changes like adding another bathroom might need to be made.
When the time comes to sell your business, the process isn’t much different. There will be small things that can be done that are the equivalent of painting a bedroom a more neutral color. Then there might be larger, more strategic decisions that are the equivalent of adding a bathroom. What's different is timing.
Selling a house is relatively simple compared to selling your business. When selling a business you should start preparing years before to be able to maximize your value. Buyers will look at the past three years of your operating history. It’s also not unusual for a business to be listed for sale for a year before a deal is reached.
What you do today matters. Knowing, understanding and leveraging the 8 drivers will help. It gives you a secret weapon. You can avoid costly mistakes. You can design your exit plan. And it doesn’t matter if you’re looking to sell this year or in 20 years. This information is important to help you create a business that is sell-able when you are ready.
We’ve written about the 8 drivers in past articles, but the best way to know how your business measures in each driver is to take the Value Builder Score. It’s a 15-minute survey that will score your business in each of the drivers.
It is free. There’s no catch. Yes, we would love to work with you to grow and eventually sell your business, but this information is too important to keep a secret. We are passionate that every business owner has the opportunity to understand and apply the 8 drivers to their business.
Not ready to take the assessment, but still curious? Visit this page to learn more about the value builder score.