The best way to generate the highest possible value for your business is to prepare for a sale long before the fact. BizJournal recently published “Top 5 rules on preparing your company for sale”, which encourages business owners to begin to plan for their sale beginning now. The article focuses on the following ‘rules’:
- Consider auditing your financial statements now – buyers will require reviewed financial statements at a minimum.
- Keep appropriate, complete corporate books and records so everything is ready to be presented to a buyer when the time comes.
- Obtain a professional valuation of your company so you can use this as a roadmap for growing your company and ultimately maximizing the exit price.
- Use the valuation of your company to determine where the true value of your business lies. This can also help you formulate a strategic business plan for the immediately future.
- Identify a second in command who could easily replace the founder of the company. This mitigates perceived risk in the eyes of a buyer, given a strategy exists to maintain customers, suppliers and employees.
Buyers tend to put their best foot forward when they sense a company is well prepared for sale. They are less concerned about whether the numbers will hold up through diligence and as a result the company receives the strongest possible valuation.