Here are some things to consider when it comes to maximising the value of your business for sale…
Keep your Profit and Loss (P&L) statement ‘clean’
A P&L should give you a clear understanding of how your business makes money. It needs to be organised, consistent and relevant — this makes it easier to read and helps you find out exactly what you need to know. When it comes to the numbers, consider getting rid of discretionary expenditure to reduce costs. You should be maximising revenue and looking for ways to show a really healthy profit.
Reduce the dependency on yourself as the business owner
What would happen if you went on holiday for a month and left your business to run by itself? If your answer is “everything would fall apart”, then you need to consider reducing owner dependency. High owner dependence makes it difficult for a new owner to evolve the business and increases risk. Consider getting a manager or a board to support you — not only will the dependency on you reduce, but you are bringing in outside perspectives and experience that will help to identify and address any challenges within the business.
Document all processes and systems
It sounds boring, but it’s incredibly important. Documenting all your processes and systems will allow a potential buyer to see, and then follow, your “secret sauce” to running your business. Making it easier for them will increase the value of your business immensely.
If you’re thinking about succession planning but don’t know where to start, reach out to the Kendons team today. We’d love to help you maximise your business before a sale.