Sometimes, business owners in Vancouver or elsewhere are forced to sell their enterprises, either to quit trading or due to other unavoidable circumstances. Selling your business at fair value is extremely important. Lack of planning can cause you to dispose your enterprise at a lower value than you should. This is because the buyer will determine its price through a valuation process and your disorganization will not help. The following are explained practices that will help you increase the value of your business for sale.
Put Your Financial Records in Order
During a valuation, a potential buyer will want detailed information about your finances because they are key in determining the value of your enterprise. Therefore, if you prepare detailed and summarised statements, they will add to the value of your business. To get clear and accurate financial reviews, you can hire a competent accounting firm to perform an appraisal on your finances. This will also determine the weakness that could be in your company’s financial operations and give you ample time to correct them.
Avoid Excessive Company Expenses
Many firms are required to find a way to minimise taxes on their profits. When selling the business, you need to make as much profit as possible, which may be contrary to that objective. It is advisable to reduce expenses that are not in any way critical to the operations of the business. These costs may include company parties and expensive conferences. Such cost-cutting measures should be done one or two years before listing your business. Well, money will be lost to tax, but you can compensate for it from the sale of the company.
Invest in Key Advisors as Early as Possible
Establishing a strong and competent advisory service can substantially increase the sale proceeds. You should, therefore, create and enhance a relationship with a reputable accounting company, investment banker, lawyer or a broker a few months before the sale. Your advisors should have relevant M&A experience to ensure that you get the best advice when you are about to sell your company.
Ensure to Incentivise Your Key Shareholders
There can be a huge conflict of interest from your main managers who are also shareholders of your business, which could create opposition during the negotiations. To minimise the chances of this occurrence, ensure to put in incentives such as stock option programs or sale bonuses. These might even prompt them to partake in activities that enhance the value of your firm.
Show Off Your Talent
Showcasing your talent does not necessary mean exhibiting your own skills, but those of all your employees as well. It is important to display your talent because many investors do not want to buy just the intellectual property; they also want to invest in productive people. Selling your talent will add to the market value of your firm and will also give a buyer confidence that what they are about to buy will not fall apart.
Top 10 Things That Add Value to Your Business, FindTheEdge.com
Small Business Advice: How to Prepare to Sell Your Company (Hint: Start Early), The Washington Pos