07 Jul The Best Business Outcomes are planned for

Posted at 12:52h in News, Selling a Business by
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To get the best price for your business you need to prepare well in advance. The more detailed your preparation is the better the end result you will achieve. Every aspect of your business will either enhance the sale or it will detract from it. The buyer will buy on emotion – and will look for “things” to justify the purchase.

Steps for Preparation.

  1. Set the date of the sale
    This will enable you to work to an end date when the process of grooming needs to be completed.
  2. Website
    This is the first place your prospective buyer will go. Does it work for the business? If it needs an overhaul do it now!
  3. Overall presentation
    Outside – Neat garden, driveway, premises. Is it inviting? Appealing?
    Inside – Reception – Is it warm, friendly, inviting, does it showcase the company?
    Offices – are they tidy, do they look organized, what picture do they convey?
  4. Systems
    Employment contracts. Also ensure there are no outstanding staff or dispute issues.
    Job descriptions
    Computer – new or old, easy to follow?
    Data base – is this current?
    Agreements – are all contracts / contacts recorded? Get as many long range agreements in place as possible.
    Financials – are they up to date? Are they accurate and easily cross-referenced? Are all journals correct? Is this a true picture of the business?
    Health and Safety – get all records up to date.
    Quality Control and Management – have all records and procedures up to date.
    Documentation – ensure all documentation is updated and shows the current face of the business. Outdated documentation is a passion killer.
  5. Increase sales
    Ensure the results are provable.
  6. Decrease costs
  7. Increase gross margin
  8. Reduce capital expenditure
  9. Eliminate questionable expenses
  10. Reduce excessive non-saleable stock
  11. Debtors
    Make sure your book is well managed and there are no long term outstandings
  12. Ensure all plant and equipment is in good order.
    Have evidence of regular maintenance.
  13. Asset list
    Prepare a comprehensive asset list. Ensure the values are correct as per your previous depreciation claimed – otherwise the IRD will claw back revenue from you.
  14. Sell off excess assets.
    The purchaser will more than likely not want to pay for these in the purchase price. It will generate more working capital.
  15. Lease agreements
    Keep lease agreements (for building, vehicles, machinery, equipment, etc.) to a minimum period. As much as possible make them favorable to a buyer.
  16. Growth plan
    Have a well thought out growth plan for the next year and include a detailed analysis for the past three years.
  17. Samples and adverts
    Ensure that all samples and ads are current. This is particularly important with respect to the business overall image. This will negatively impact the business in a major way – it will be like trying to sell something that is being propped up.
  18. Signage
    Again ensure the business has updated fresh and appealing signage.
  19. Production
    Go through all production processes and try to make them as efficient as possible. Every dollar going to the bottom line will increase the sell price.
  20. Human capital
    Critically appraise all staff. Do they look smart and professional? Dress code, appearance, grooming – all add value. People are the human capital of the business – the new owner is looking to take them on as well.