Why you should keep your business sale-ready

Written by Roger Jowett, Brainiact Mascot

Preparing your business for sale can be like preparing your home for sale. Many homeowners live comfortably until they decide to sell, then rush to spruce up their space, often realising too late how beautiful their home could have always been. It’s the same as selling a business. I firmly believe that your business should always be in a condition that you’d be proud to showcase at a moment’s notice, not just when you decide to sell.

A few people start building a business with the intention to sell it a few years later and have milestones to mark if it’s ready for sale. For most people, however, there are so many twists and turns in life, and there are often trigger events like health or family issues that make them want to step out. This is why having an ‘always ready to sell’ business is so important. Now, let’s talk about how to get your business to this highly-optimised state.

Preparing the business

First and foremost, businesses, like homes, should be tidy and well-organised. This means a physically clean workplace and, more importantly, having a well-run operational structure where everything works as seamlessly as possible. This involves having a strong customer base, effective services and products, a compelling value proposition, a great team, and efficient processes. These are what make a well-performing business.

At any point, you should be able to ask yourself, “Would I be able to showcase my business in the best possible light if somebody comes knocking on my door right now and says they’re looking to buy my business?” If your answer is no, you need to get it to this point as quickly as possible. Having this mindset while running your business won’t just be great for the sale phase, but also for growing and optimising your business. A well-kept business ensures that you are always operating at peak performance.

Know your business inside and out

It’s important to really understand how your business works and how it makes money. You should be able to explain which products or services are bringing in the most margin, when they do, in terms of seasonality. You also want to be able to talk about the markets that you serve. If you serve the renovation market, for example, you should know if your market is cyclical. Maybe more people renovate in the winter than during the summer, or on weekends rather than weekdays? You should be able to talk about the flow and the rhythm of your business through data. 

Knowing these details will not only make it easier to impress potential business buyers, but it will also make it easier to impress customers and run your business more efficiently. Remember, you can and should continue to grow your business while preparing it for sale. This will ensure you get the best possible sales price when the time comes.

Highlight your team

The people in the business are just as important to potential buyers as your processes. You need to be able to talk with the same passion about your employees because your people are behind everything; the operations, the value proposition, and its potential to grow.

Being able to talk about the greatness of your team starts with understanding the strengths and clearly defined roles of your team members. This shows that your business isn’t just about you – it’s about a group of people who can keep things running smoothly, even with a new owner.

An employee can choose to leave your company at any time they want. So, a smart buyer will be asking whether the good people will be willing to stay even after a new owner comes in. For your people to stay, they need to enjoy their job. So focus on building happy, focused, hard-working people. Do you have organisation charts, clarity of roles, learning and development opportunities, and the ability to recruit and retain employees successfully?

Operate without the owner

The litmus test to know if your business is a strong one and is ready to sell is that you, as the owner, can go on holiday for two weeks with minimal to no contact with your team, and your business continues to run. You might come back to a few things that didn’t go right and you’ll need to fix them, but it won’t be dramatic. Your team will have the skills and confidence to navigate those two weeks without the boss. Getting your business to this point comes down to having efficient operations and processes, and empowering and trusting your people.

Building a business to the point it can operate without you will be great for the sale process. Buyers want to be assured that things will continue to run smoothly without needing the constant presence of the owner. But even without a potential buyer, a business that can sustain growth and operate well without the owner is a great business.

Get help when selling

When you decide it’s time to sell, you’ll need to understand the sale process, although this can be quite difficult. One of the biggest mistakes I see small to medium-sized business owners make is not getting help while selling. Sure, you’ve become an expert at running your business and showcasing how great it is, but the actual business sale process is a whole different ballgame.

Work with professionals who specialise in selling businesses as they can offer invaluable advice and deal with the tricky parts. They are professionals – they help you find a buyer who’s prepared to pay a good price, allowing you to focus on maintaining or even growing the business during the sale process.

I’ve personally worked with professional business brokers and seen how good they are. Embarking on a business sale process with the help of a professional business broker allows you to keep running a good business. Grow the business and get a better sale price!

Relationships with these experts can be formed fairly early in your business journey. When you’re networking, you might meet somebody who is a business broker. Even though you’re not looking to sell at that moment, you can start to build a relationship with them. You’re not asking them to help you sell their business, you’re just getting to know and trust them. Then, one day you may be giving them a call.

Communicating with your team

How and when you tell your team about the sale is delicate but very important. My advice for small business owners is while you shouldn’t tell everyone you’re selling, you still need a couple of your people to be in the loop. It’s a balance between needing help from the inside and not spooking the rest of your people. You don’t want to be asked 1000 questions from your employees because you won’t have any answers and that will just scare them even more. There should be a veil of secrecy. Some business owners may be uncomfortable doing this because they’re not being open and honest with their employees. But sometimes deals don’t happen and sharing with your team something that might not happen can cause unnecessary stress.

Announcing you’re selling the business too early can lead to your employees feeling uncertain about their futures and cause problems in the operations. However, once a deal is certain, you must share the news promptly and transparently so you can manage expectations and ease the transition.

Valuing your business

Knowing the worth of your business is fundamental. Many business owners don’t understand the value of their business, leading them to undersell. The easiest way to know how much your business is worth is to get a valuation expert for an accurate measure of your business’s value. They’ll compare you to similar businesses that have sold and consider various factors, from cash flow and market positioning to physical assets and intellectual property. Working with them not only helps in setting a realistic price but also in negotiating with potential buyers.

Plan for post-sale

Finally, it’s important to know that selling your business can be quite emotional. Many business owners struggle with the void left after a sale. You spend many years dedicating every hour of every day to this business and suddenly, it’s gone. It’s a good idea to have plans for what you’ll do next, whether it’s starting another business, picking up a new hobby, or doing something else you care about.

Keeping your business ready for sale does more than prepare you for the possibility of selling; it also helps you keep your business running smoothly and efficiently. This strategy not only sets you up for success in case an opportunity arises but also keeps your business healthy, growing, and profitable, which, after all, is the ultimate goal for any business owner.