Spring Cleaning: 4 Quick Ways to Ready Your Business for Sale in 2016
Are you starting to think about selling your business? Maybe you’re hoping 2016 is the year to make it happen. If so, there’s no time like now to get started on the process. Here are four things you can do to get started.
- Spiff yourself up.
If you’re selling a home, you think about curb appeal, right? If it doesn’t look good from the outside, you won’t attract any buyers. So you might give the front a fresh coat of paint, hang a wreath on the door and trim up the yard.You need to do the same for your business. How’s your website looking? What’s your social media presence? Does your location look nice from the street? If you don’t provide a positive first impression, you could turn a potential buyer off before he has a chance to look inside. 
Report your revenue and expenses accurately.
Some small business owners under report revenue or inflate expenses to improve their tax situation. Those practices may save $5,000 or $10,000 in the short run, but they could affect the business value by $90,000 to $120,000.We talked with a seller the other day who was under-reporting revenue by $150,000 to $200,000 a year and was hoping to sell for around $3 million. We’ll be surprised if the seller is able to sell at all, given the inaccuracy of the books.- Clean up your assets.
Do you have equipment or other assets that don’t work or aren’t providing value to your business today?If so, sell them off before looking for a buyer. Streamlining your business will help buyers understand what’s really necessary to operate. - Engage an advisor.
Advisors typically charge just 10% of the deal, and they can vastly improve what you earn on your business. We recently talked to an owner who was so concerned about the cost of an advisor that he literally gave away a business and real estate worth $350,000!He left $315,000 on the table based simply on his fear of paying too much for help. Any advisor worth his or her salt will make the terms of the deal clear from the beginning, so you can make an informed decision about whether to engage.
We often talk to sellers who think they’re ready but who are missing these important basics. When that happens, it can take several months to straighten out.
Best of luck with your spring cleaning and tax reporting!
If you or someone you know is interested in buying or selling a business, please call us at 913-383-2671 or contact one of our Apex Business Advisors today!
