What Does a Business Need to Have in Place to Become Saleable?
The other thing is to make sure that the business owner is not the key person in the business. Because that’s one of the biggest devaluers of small business in particular. Basically, it’s getting your business so that it can run on autopilot. And what a great goal to have, to be able to have your business running on autopilot like that. So you can head off and take your holidays and be away, sitting on the beach and just looking at what’s coming in as far as your KPIs are concerned, and just relaxing. That is the ultimate, in terms of the business.
Also, make sure that your marketing systems are completely documented. Just thinking about the records that you’re keeping, all of this stuff sounds really boring, but you need to have it all well documented. This includes trademarks, domain names, hosting set up, logins and passwords and the staff contracts, all that stuff. Which is just taken for granted half the time.
People often fly by the seat of their pants. Is it here in the bottom drawer? Okay, then what else is in the bottom drawer? I mean those are the sort of major areas that they really need to get systemised, and the contracts with their suppliers. All of those sorts of things they may not have even thought about.
And also employment agreements and your intellectual property agreements, whatever that might be. Because a lot of people don’t realize the intellectual property that they have in their businesses, like their sales system, for instance. Or their training systems. That’s all IP.
The best time to sell your business is when you have a track record of at least two to three years of good profits. But then, sometimes people will ride it over the top. They’re trying to time the market, which is impossible to do. It’s impossible to do with the stock market.
Timing is best when your business is on a growth trajectory so you can forecast the revenues and the profits. Having a forecast is another thing because a lot of small businesses don’t do that. They don’t actually prepare their own forecast. They just don’t prepare their own forecast. But having those is crucial, particularly when you’re wanting to sell your business. Paint the picture ahead for a potential buyer and what they want to actually get out of the business.
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