Once you have made the decision to sell your business, you need to get a professional valuation. This is the only way that you can know the true value of your company as it stands, and you need to know this before you start courting buyers and entering into negotiations. Of course, your goal is to get the maximum financial compensation for selling, and so it is in your best interests to boost the value of the business wherever possible. Here is our guide to some simple steps you can take.
Optimize Your Operations
Any buyer will want to see that you are profitable and that your profits have not been stagnant. You can achieve some quick wins when it comes to profit increases by making your business as efficient as possible, cutting all the costs that you can, and streamlining your processes.
Solidify Your Contracts
Make sure that your contracts with suppliers and any large-scale customers are as attractive to a new owner as they can be. If existing agreements are coming to an end soon, get them re-signed sothat the business can carry on with current costs and expenses –this way your buyer will know that they are taking over a going concern with consistent costs.
Pharmacy and digital health companies frequently have hands-on ownership –but, of course, you won’t be there when the business has been sold. You need to start to try and remove yourself from operations as much as you can and ensure that you are delegating tasks to capable personnel that will be staying with the company. If you donot do this, then unfortunately the buyer will recognize that a lot of the value in the company is actually tied up in you specifically, which will cause a sharp drop in the amount you can expect to be offered.
Check Your Aesthetics
Your company might have a great market share and enviable profits, but if the buyer visits your premises and it is untidy or in disrepair, they will likely be put off. Any repairs that you have been putting off, or any restyling/redecorating that needs undertaking –get it done. That way your buyer will have a better opinion of the business and is more likely to negotiate with you in your favor.
Plan For Growth
Almost any buyer will want to start increasing the value of the business as soon as they take over –particularly if they are an institutional investor or private equity company. If you can demonstrate that you have reasonable expansion or growth plans, based on solid market data, then you can expect your valuation to be increased. Even though you are planning to exit the company, conduct your market research and build your growth plans as if you were staying on.