7 ways to prepare your business for sale
Maximizing your business’ sale price requires a great deal of preparation. Whether you’re a single location shop, a family-run organization or any type of business in between, there are steps you can start taking today to smooth the transition. Dominic Reolfi , CPA/ABV, MT is a manager at 415 Group and has overseen many business valuations. Read on as he takes a deeper look at how to prepare for a business sale.
Whether a business sale is in your short-term or long-term plans, there are many steps you can start taking today. Not only will these preparations help you maximize your sale price, but they’ll also help elevate your business. That’s because things like balance sheet optimization and minimizing tax liabilities are really just best business practices anyways.
The biggest mistake that I see businesses make is simply waiting too long to start preparing.
Selling a business requires quite a bit of planning. And the best time to start that planning is now, not when unforeseen circumstances force a sale. We see this scenario many times in family-owned businesses. Ownership’s plan might be to pass the business down to the next generation, however, the children may not be interested when it comes time for succession. In these cases, not being prepared to sell to an external party will put the business at risk of being sold below its actual value or create other complications–many of which could’ve been solved by preparation.
Another common issue is not knowing your business’ real value. While some businesses may have a ‘gut feeling’ of their market worth, without the proper research and business valuation, their asking price might be problematic. Starting a business sale with a value that’s too low is likely to have you leaving money on the table. On the flip side, starting at too high of a valuation can scare off potential buyers and limit offers.
At 415 Group, we’re experts in helping prepare businesses for sale. In fact, we have Stark County’s largest team of certified business valuation experts on staff. From business consultation to preparing financial compilations, we have the knowledge and tools to set you up for a successful sale.