After starting up and running a business, the idea of selling will be an inevitable thought in the back of your mind. Taking your business to sale can often be one of the most valuable and gratifying experiences you’ll ever do as a business owner. It can also be an emotional and stressful time for business owners when trying to navigate the rocky road of selling.
As a business owner, you would’ve gained valuable experience over the years in managing and operating a company, but when it comes down to making your business more attractive to potential buyers and ensuring that you’re financially ready to exit, do you have the necessary experience, skills and abilities to achieve this?
Our experienced team here at EFM Growth will guide you through the critical steps of preparing and making your business ready for sale and managing the sale process through to a successful completion. In this article, we’ll be covering the importance of not taking your company to market too soon.
In all walks of life, patience is a virtue and a great teacher. If you were to find that your company is showing an increase in revenue and profits, bringing in new and retaining loyalty from existing customers and building up in staff & reputation, there’s a looming temptation to begin connecting with advisors that can help to expedite your company’s growth plans and potentially take your company to sale with an attractive offer. However…..don’t be deceived by the low hanging fruit.
Timing is everything in business and it’s imperative that your company is ready in all areas, inside and out, to avoid calamity and receiving scrutiny from potential acquirers. Before stepping into meetings with potential buyers, you need to make sure you can provide a full report, both financial and non-financial, disclosing the businesses history to ensure that buyers can perform their due diligence checks. As a business owner, if you’re premature with going to market and skip vital steps in the preparation process, this can negatively impact the value of your business.
It’s important to set objectives in your strategy and to always remember what your future goals are to ensure you stay on track. Focus on these three elements:
Get your business into a fit state
This may not be an adrenaline pumping activity for most business owners, but it’s a very important part of the business attractiveness phase in preparing a business for review by a potential buyer. Since they’ll potentially be parting with money and/or shares, buyers are going to want to scratch below the surface and discover the company’s core strengths and weaknesses. Think of this process from a personal perspective. You wouldn’t sell your house if you hadn’t checked the foundations and given it fix up and a coat of paint. First impressions count, so to avoid having a black mark against your name and company, ensure your company is in sterling condition and that all matters are in order and taken care of.
Your product offering
Another crucial matter to remember when looking to grow is what makes your company’s product offering so unique and different from other competitors. If you’re a company still riding on the success of your very first product or service innovation, you have to be prepared for the future as just like customers, buyers always want to see more of what you’ve got to offer the market and that it will be as successful as the first. As the business attractiveness phase is so important and time consuming, it’s vital to ensure that as the business owner, you’re dividing your time up right to focus on all important areas, including scaling up your product/service offerings to ensure production and delivery capabilities match set ambitions.
Why are you doing this?
Last but not least, what is your true reason/s for wanting to grow or sell your business and stand before a buyer? It’s important for business owners to not lose sight of their original reason. If they’re choosing to make an important decision in a hasty manner, it could be too late further down the line. Business owners can deviate from the plan for a number of reasons whether it be due to impatience, financial gain or a lifestyle change. However, by sticking to the path, remaining patient and staying true to their original plan, business owners can potentially reap the rewards and get the maximum value offering for their company.
If you’re a business owner looking to expand or sell, EFM Growth can help. Our experienced growth partners can help support your growth ambitions. Get in touch today! Email our team or call 01582 516300.