5 Ways To Boost “Business For Sale” Profits

5 Ways To Boost “Business For Sale” Profits

Selling your business for the maximum amount is crucial to achieving your exit goals and moving forward with personal plans. When owners decide to put up their business for sale, some are actually shocked to learn how little their business is worth when it comes time to sell it. Before you decide to sell, take a look at where you currently are, what can be done to increase the ‘business for sale’ value and appeal to small business buyers, and then formulate your exit strategy.

Increase profits…

This one probably goes without saying; the higher the profit of your company, the more it will likely fetch as a business for sale. Buyers will definitely be willing to pay a higher premium for those companies that can quickly provide a return on their investment; and if you can show that profits are steadily increasing, that is an even bigger draw. With help from a business broker, you can look for ways to create additional efficiencies and cut costs to boost profits quickly before the sale.

Keep the team intact…

A high quality staff can increase the price a new owner is willing to pay for your company, but not if they are all likely to bail within weeks. After all, nobody wants to buy a ‘going staff’ concern for top dollar just to have to treat it like a start-up. Skilled and long-term employees create stability for the business and generate revenues. Consider building incentives into your key employees’ pay plans, to keep them loyal to the company. Profit sharing or equity ownership can also go a long toward motivating them to stay even after you sell the business.

Recurring revenue streams…

While you are contemplating selling, brokers can help you think of strategies to increase sales and pay particular attention to recurring revenue sources that will generate income for the new owner immediately. Lots of loyal customers and recurring revenue streams will give buyers a healthy dose of confidence in your business, and in their ability to successfully take over and make a healthy profit.

Standardize everything…

Create seamless processes, and be sure that everything runs smoothly. Remember that as the owner, you are one of the most valuable assets of the company. You need to show potential buyers that the company is a well-oiled machine and will continue to run efficiently without you. Documenting your processes is even better, so the buyer has a handbook to refer to during the early days.

Spring cleaning…

Even if it is the middle of winter, clean things up. A buyer’s first impression of the business is typically the physical location, so make sure it looks good from the outside, too. You don’t want them to pull into the parking lot and then turn around to leave. If painting needs to be done, handle it. Renovations or repairs, and new furniture, are all minor costs that can lead to a bigger profit with the sale.

While this is not an exhaustive list of every detail that is handle prior to listing your business, it does provide pointers on where to start, and where to tighten up. This helps ensure that the business for sale is attractive to many buyers, and will garner you a nice profit.

Contact Del Lingco International today, and speak with one of their professional business brokers.

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