How to maximise business sale value
It is vital that you maximise the business sale value when selling off your business. Read on to find out how you can do it.
How to achieve the highest sale price
It will take more than the reputation and credibility of your business to achieve the highest sale value. There are many other factors involved such as growth potential, reliable revenue streams and a streamlined operation which makes your business unique. You should keep the following considerations in mind to attract higher offers:
In order to value your business, you will have to show your accounting records such as accounts and a list of asset and liabilities, including details of any intellectual property. Further, you will have to provide a portfolio of financial and accounting record.
Therefore, you want to ensure that all information you have given is accurate and up to date. This will protect you from the possibility of your business being overvalued or undervalued, which would certainly disrupt the process of sale.
Evaluate growth potential
Your potential buyers will not only want to know how your business is doing currently, they will also be very interested in knowing the future potential of the business. If you establish financial targets at an early stage, it will help you pave the way for the business's future growth.
Conducting business reporting
The quality of regular reporting and analysis of financial records will reflect on your insight, the state of business affairs and whether you are neglecting any part of your business operation. Managing risk is a vital factor in which can affect the performance of your business, cash flow and financial success.
Keeping a close eye on the cash inflow and outflow will allow you to keep on top of your business's financial health. It will also ensure that the assets of the business are balanced against the liabilities.
Consistent revenue stream
If your prospective buyers are assured that they will be inheriting a consistent revenue stream and their investment will see a return. This can happen if you have loyal customers and long term supply agreements.
By having multiple revenue streams by populating the risk across a handful of high value contracts, if the business becomes insolvent, it will not threaten your business's viability.
Minimise unnecessary expenditure
You will have to streamline your outgoing and minimise the unnecessary expenditure. This will not only reduce your overheads, it will also ensure that the business is cost-efficient. Further, this way you also reduce maintenance which will make your business attractive to a prospective buyer.
Carry out regular cost-cutting exercises which will reflect that you have managed your business well and transparently.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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