So here’s our list of the 10 things you’ll need, to sell your business. Of course, these are all extremely useful if you’re not selling, but rather just want to run your business more efficiently, and with less stress.
The first and most important point to know, if you are considering selling your business, then the safest bet is not to tell anyone. DON’T tell your customers, DON’T tell your staff, DON’T tell your suppliers, and especially DON’T tell your competitors.
1. Diversified Customer List - The majority of small businesses rely on a handful of key customers, most of the time these customers can provide anything from 20-60% of the company's total sales turnover. If anything should happen to that customer, or the business relationship, then your business will probably be in serious trouble. The same goes for customer sector too. The ideal situation, is to have any customer making up no more than 10% of the total sales, whilst customer sector making up no more than 20-30% of total sales. This means working across 4 to 5 sectors.
To read our article on creating a diversified customer list, ‘Reduce Market Risk With a Diversified Order Book’, click here.
2. Management Team - The majority of small businesses are owner reliant. As the owner, if you don’t turn up to work for the next 12 months, you’re business will probably die.
The way around this, is to build and develop a team of people, both internally and externally that can run the business without the need for you being around.
To read our article on how to create your management team, ‘How to Make your business less owner reliant’, click here
3. Systemised Business - The source of most problems stem from a lack of control. Those problems materialise because nobody in the business, knows clearly how to deal with them, and stop them happening again. This causes wasted time, resource, and energy, as the business continues to experience the same problems, without considering the root cause.
When a business is systemised and its procedures automated, it means problems, along with any repetition of effort, is reduced significantly. This all leads to a more profitable and efficient business.
To read our article on how to systemise your business, ‘Systemising your business - The key to reducing your day to day problems’, click here
4. Operational Plan - The majority of small businesses have no clear vision of where they’re going, or even why they exist.
Staff turn up for work, because they have to, rather than because they want to. The business turns into a perpetual cycle of going to work, but never really moving forward toward a destination or target. Without clear reason for doing what we do, this can lead to low morale, stress, and lack of motivation in the business.
An operational plan sets a target and a pathway for the business. It looks at what resources are already in place, and what else it needs to reach those key milestones in the business journey to reach that long term destination.
To read our article on how to create an operational plan for your business, ‘Operational Plan - The Secret to captaining your ship successfully’, click here
5. Marketing Analysis - If you know what worked previously, and more importantly what didn’t, then you can achieve your vision faster, you can achieve it more efficiently, and most importantly, you can achieve it more cost effectively.
To read our article on how to perform a marketing analysis, ‘Marketing Analysis - Using history to predict the future’, click here
6. A Buying Audience - Regardless of whether you’re selling your business, or whether you’re selling a product or service, the same principles apply. You need an audience. The larger that audience is, the more successful you’ll be, at achieving your vision.
The key to building your audience, is to discover exactly what your audience wants, and then provide it to them.
To read our article on how to build your audience of potential buyers, ‘Building Your Audience - The Number 1 Secret to Achieving Your Vision’, click here
7. Physical Paperwork - Most small businesses, apart from looking at their bank statements, they don’t really know where their business is at, on a day to day basis. We could go much deeper into that statement, but generally it could mean understanding which contracts or customers are profitable. It can also mean having an up to date record of all of their assets, their suppliers, having an eye on what’s happening in their market, or even better, in their customer sectors. The more information a business has, the easier it can make decisions about the business. An example of this being true, imagine there are two armies preparing to do battle. If one army has people out there gathering data & information about the enemy, it can better prepare itself for battle. Now which army do you think will win the battle? The one with the information, or the one without? The same is true for your business.
To read our article on which documents will gives you the data you need, ‘Paperwork - The lifeblood of any business decision’, click here
8. Business Analysis - Performing a business analysis is like taking a helicopter view of the business, the market, & the waves coming on the horizon.
It identifies opportunities to develop and improve the business. It identifies what might be happening in sectors that can impact your business. It can also identify weaknesses and risk to the business, so that actions can be taken, and the risk removed.
To read our article on how to perform a business analysis, & what you need to include, ‘Business Analysis - A Helicopter view for the future of your business’, click here
9. Information Memorandum - An Information Memorandum provides an overview of your business, giving any potential buyer the information and the confidence they need, to move the acquisition process forward
To read our article on how to prepare an Information Memorandum, and what to include, ‘Information Memorandum - Creating the confidence to move forward’, click here
10. Professional Adviser Team - With any business operation or project, you need the best team around you. You’ve probably heard the story that your team is only as strong as its weakest member. Why would you compromise the success of achieving your vision, by choosing a player that wasn’t playing at the level you needed.
To read our article on which types of professional advisers you’ll need, ‘Professional Adviser Team - Your Dream Team for Success’, click here
We hope you’ve received some value from this article, and some information that you can use to move forward toward your vision.
If you’re confident that selling your business is the way to go, or perhaps you’re undecided, it’s important to consider the significant amount of effort and resource you’ll need to make it happen. It’s a full time job. - The time investment alone is enough to put anyone off. So imagine for just a minute, that you didn’t need to do all of this work. What if this could be done over the next 3 - 5 years (by someone else). Everything we’ve listed in this article, is what you’d need to do, if you were selling through a business broker, or direct to a buyer.
Unlike other private equity firms, our focus is on growing businesses at the smaller end of the market. We’ve worked in, and grown our own businesses in the exact same fields you work today. We’ve spent years coaching and supporting small businesses just like yours, developing their teams, and helping them to grow, but now, we’d like to help you.
We have a solution for business owners that need to sell their business immediately, or for those who want to stick around for a few years.
If you’re considering the options to grow or sell over the next five years, read more about how we're helping others just like you. Click here to read about our unique approach to helping you get what you want with the YokeFormula™ for your business.
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