Most business owners are not fully aware of all the various aspects of their business that require attention in order to be able to present it in the most attractive manner to potential purchasers.

The preparation of your business for sale should ideally form part of an overall exit strategy. Many of the experts in this area recommend that exit strategy planning and preparing your business for sale should start from as early as the start-up period.

The first step in preparing your business for sale is to consider who is most likely to purchase it. Possible groups or types of purchasers to consider might include: Owner operators; Investors; Industry participants, competitors or suppliers and the current management team.

Other things to consider include the fact that an investor may be more interested in the business if it has an existing experienced management team who can assist in running the business following the departure of the current vendor. Alternatively, a current competitor who is looking to purchase the same business may not require the management team as this could be seen as an unnecessary expense.

It is also important to recognise the key characteristics that a potential purchaser will most probably be seeking.

Generally speaking, businesses that attract high selling prices are those that exhibit the following characteristics:

• Provides a comprehensive understanding of the market in which the business operates
• Presents a strong protected revenue with good profit margins
• Currently possesses a strong management team which is not too reliant on one or two individuals
• Keeps comprehensive financial records
• Has successfully implemented the use of procedures with which to continually review performance

 It is also necessary, when preparing your business for sale, to identify any issues which may potentially challenge the sale of the business or may decrease its sale price. It is essential to attempt to avoid the discovery of weaknesses during a purchaser’s due diligence as this will invariably have a negative impact on the approach of a purchaser towards negotiations.

One of the biggest and most common mistakes made by business owners is to leave preparation of their business for sale to the last minute. As the well known saying goes “Fail to plan, plan to fail”.

If you would like more information or advice on Things to remember when preparing your business for sale please <click here> or call 1300 QUINNS (1300 784 667) to contact us.