If you need to sell your business and want to make it look more appealing to others, you should consider adding value. There are several ways this can be done, resulting in you being able to sell for a higher price than you may have anticipated.
Corporate consultant Neil Debenham, who has bought and sold several companies throughout the UK, has these tips for anyone looking to quickly raise some value.
Consider diversification
If your business is about to change hands, it may be that customers who have been loyal to you since its inception, want to carry on being loyal to you and will go to your new company, if it is similar, or find somewhere else to buy.
If you own a small company and a lot of your takings come from a handful of major customers, losing them could prove detrimental to your business and therefore, not prove acceptable to a potential buyer, as it’s seen as a risk.
Neil Debenham adds: “Before you sign on the dotted line, consider diversification – could you sell more products or services to spread the risk factor? You have to weigh up the costs of this compared to your sale value.”
Boosting profits
This may seem silly as you’re about to sell your company, so why make improvements to profitability now?
Because you can increase the value and therefore sell your business for more money. Before selling your business, reduce those costs you don’t really need – the milk deliveries, the coffee pods and even finding more efficient processes. Are there middle-men that can be removed to save cash?
Even consider moving premises. Can you switch to an office on the rim of the city and save yourself hundreds in ground rent each month? If you’ve locked yourself into a major lease, ask the landlord if you can sublet the space.
Grow, grow, grow!
Every business owner loves an opportunity for growth so the more chance of great profits in the future, the better.
Consider ways you could scape up your business, whether through acquisition or expanding into new locations. It’s a bit like selling a house and offering some building extension plans with it. The potential for new plans will always put you in a stronger position when it comes to sale time.
Offer extras
When it comes to making sure that customer base stays for your sale, you should start adding more than just your products or services.
Neil Debenham says: “You can add more value by providing expert advice that perhaps, would enable them to use a product or service more easily. Perhaps you could deliver faster? Or offer a free consultation? If you want to deliver real value, provide a level of advice that is more valuable and sophisticated than what your competitors offer.”
Customer service is another one to watch out for as it’s essential if you want to add more value. Even if you have a quality product or service, it’s only the halfway point to encouraging customers to do business. What’s going to make them choose you over another company? The personal touch, that’s what – it means more to customers than you could ever realise.”
Rave reviews
Buyers will ask you what your existing customers think of your business and they will seek out proof by searching your Facebook page, website and twitter feeds – anything they can find to prove how interactive you’ve been. If you don’t engage with your customers and respond positively to feedback, it’s already looking like a sour deal and a good indicator of what they can expect going forward.
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