Five Tips for Selling Your Business For Top Dollar
At some point in time, you may consider converting your business into a liquid asset. The reason for this may be related to a change in interest, lack of a successor, or difficulties in coping with present trends. Whatever your cause may be for selling your business, it is vital for you to strategically execute your exit plan to get the best price for your company.
To mark up the value of your firm, there are a few things you can do to make it more appealing to the right set of buyers. In order to do this effectively, it’s best to trust an expert for guidance and clickguru houses industry-best marketing experts with a knack for business growth. We help businesses devise calculated plans to boost their reach and revenue to meet their goals. To help you get similar results, here are five tips for selling your business for top dollar.
Tip #1: Be attractive
People usually know what they want when they see it. That first impression holds true for purchasers of companies. If you’re a business owner with decades of experience with a fantastic underlying business, it’s essential that you look the part. We’re not saying that you need to do a 180-degree turn to change your business, but a revamped brand and website is a great starting point. We’ve seen this time and time again - attractive brands sell for bigger multiples and more money.
Tip #2: It’s what’s inside that counts as well
While having brand integrity is vital, a business owner looking to sell should prepare their books to help drive profitability. Have you been thinking about that 3% price increase for years, but just haven’t had the guts to do it? Is there some redundancy in operating expenses that can make your business more profitable? Making these changes before selling honestly amplifies the selling price.
For example, if you can increase EBITDA by $100,000 in a year through revenue growth and cost savings, you’ll likely increase the selling price of your business by the multiple of EBITDA. Let’s say, if the buyer of your business is paying five times EBITDA, you will get an extra $500,000 for your business. We would recommend beginning this process at least a year in advance for some of the changes to take effect.
Tip #3: Get a strategic buyer
There are two types of buyers for your business. One is a “financial buyer,” who is a buyer outside of your industry with only a financial interest. The second is a “strategic buyer,” who is usually a buyer that operates in your industry and will see an increased benefit from buying your business over a financial buyer. The reason for this is called “earnings accretion,” which means that the strategic buyer of your business will likely be able to cut a variety of costs and increase revenue by adding your products and services into their own distribution system. This earnings accretion will allow them to pay more money for your business than a financial buyer.
Tip #4: Get multiple bidders
Like many things in life, people want what they can’t have. If they know there are other buyers out there for your company, especially if it is one of their competitors, they will very likely be willing to increase the multiple and amount they pay for your business. Don’t be shy about it - let bidders know that there are others out there competing.
Tip #5: Hire an expert
Having an expert to represent you in the sale of your business can help you make more money through an effective sales plan. While there is a commission, good agents are well-connected and can usually negotiate something better than what most people can alone. At the very least, it’s undoubtedly worth consulting with a few experts to see if there are aligned interests.
Selling a business isn’t something you do overnight. It takes time to prepare your company before you put it up for sale. To make your experience a fruitful one, availing the guidance of a professional marketing company, like clickguru, is a must. Through our smart marketing techniques, we help you uplift the image of your business and boost its earnings through calculated efforts.