For many entrepreneurs, their long-term goal is to either sell off their stake in the company or to be acquired by a larger business. But the problem is that many of them do very little preparation to make sure that they are ready for such an acquisition. Here are our Top 5 Tips for making your business more highly saleable:
1. Make sure that your business makes a name for itself within your industry. After all, how is anyone going to purchase your business unless they have heard of you already?
This will involve a lot of tireless work on your part. You’ll have to attend every relevant networking event to make contacts who might be interested in acquiring or investing in your industry. You’ll also have to generate a lot of positive coverage in the trade press for your industry and this will require some creative thinking. It will be easy for you to generate launch publicity, but keeping your business in the spotlight for an extended amount of time is a harder task.
2. You will need to be realistic about your business in order to have any hope of selling it. This will involve leaving your ego at the door and not being overly defensive about potential criticisms. If you already know about (and accept) the weaknesses of your business, then it won’t sound quite so abrasive when someone who is looking into purchasing it decides to point them out.
3. This might sound obvious, but your business should make a profit. Potential purchasers will find that a business which continually loses money is a much tougher investment than one which, at the very least, breaks even. Unless your business is truly a unique proposition and the intellectual property alone is valuable, it will be extremely difficult to sell a loss-making concern.
4. Get your financials in order if you want to be taken seriously as a potential acquisition. Poorly managed financials are like flashing neon warning signs for any serious purchaser. If you haven’t taken due care and attention about the most essential area of your business, what does that say about the rest of your firm?
5. Although this seems strange, you need to make yourself as irrelevant to the success of the business as possible. If it is blatantly obvious that the business is only profitable because you put every hour of the day into it without even drawing a salary, this will be off-putting to an investor as they are not buying YOU, they are buying your business!