Paperwork seems to be the dread word for most small businesses. Let’s face it, you didn’t start your business, to be sat behind a desk, shuffling paper did you. If you’re an engineer, or any kind of ‘hands-on’ business owner, that’s probably the last thing you expected to be doing. You’re much more at home, just getting stuck in, getting your hands dirty, and generally getting things done. That’s where you get all of your passion & energy. Expecting you to shuffle paper behind a desk, can feel like quick sand.
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. That could mean understanding which contracts or customers are profitable, but it can also mean having an up to date record of all 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.
If I’d said the same thing 15 or 20 years ago, the reason would have probably been understandable, but now it’s never been easier or cheaper to monitor your business in real time. After the initial set up process, there are online software programs and apps that keep track of a whole range of activities in your business, whether it’s tracking your vehicle mileage, adding your receipts to your expense account, or producing up to date, & live company accounts at the click of a button.
The truth is, without these, it’s impossible to know how your business is performing. For anyone wishing to sell their business, this is especially difficult. Every potential purchaser will want to see this level of detail. If that’s the case, then why would you wait until they ask, if that very information can benefit you right now. The task of finding and collating the information will have to be done at some point, we may as well do it sooner rather than later, then we can take the necessary decisions and improve the business before a potential buyer ever comes close.
So in brief, I wanted to cover what any business buyer will want to see, before they progress with a purchase. The idea is that we’ll take the time to put this together now, and then it’s a much easier job to keep it updated, and current.
Financials - Historic management accounts
Financials - Historic bank statements
Financials - Up to date full accounts including balance sheet
Register of Business Assets - register (properties, stock, equipment, IT, vehicles)
Register of Business liabilities (loans, overdraft, leases - value & term
Register of Intellectual property
Market analysis, detailing your competitors & market share
Register of Customers - Current & historic and how long working with each, and their sector
Register of Suppliers - current & historic
Register of employees - Age, Qualification, Hours of work, Salary, Paid holiday entitlement, other benefits, Main role, Time employed - Current & Historic - If left, reason for leaving
Register of Client Contracts - Value, term (start and finish date)
Register of Supplier contracts - Value, term
Register of Certificates, Awards, Accreditations & Licences
When we have all of this information, we can use a number of Apps and programs that quickly update as things change. With some programs we can also set alerts to let us know when certain events occur in the business, for example when a customer pays their invoice, or perhaps when our bank balance reaches a ‘low’ point, and might need an influx of additional funds. The benefit of this means, if we choose to go on holiday, we can log into the apps on our mobile phone, and get live data of what's happening in our business, from anywhere in the world. It’s another step toward removing any reliance on you as the business owner.
In the next post, we’re going to look at the final piece of the jigsaw, that you’ll need to sell your business. ‘Business Analysis - A Helicopter view for the future of your business’, Click here to read it now.
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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