When selling your business, getting the best possible price can mean the difference between reaping the rewards of years of hard work, or simply letting it go to cover your costs.
You’ll also need to consider how selling your business will affect your personal and financial circumstances.
It’s important to start preparing your business for sale as soon as possible – in fact you should be preparing to sell your business right from the start.
Getting the best possible price is all about been prepared and having everything in order. It’s much easy to do that as you go, so that when the time comes everything is ready.
Here are MWM Advisory’s top five tips to maximise your business sale multiple to help you achieve the results you deserve.
- Business valuation
Get a realistic idea of what your business is worth from an objective, outside source. A professional valuation will give you a basis for gauging buyer offers and will give you an idea of what you can expect to net from the sale.
- Get your accounts in order
Buyers evaluating your business generally require at least three years’ worth of financial information. The more formal your statements (accountant-reviewed or prepared vs. internally generated statements), the better the impression you’ll make and the easier the due diligence for a buyer.
- Make a good first impression
Buyers look for companies that show well, as an orderly shop is often indicative of an orderly management team and back room operations.
- Keep your eye on the ball
Don’t let your business performance decline because you’re too focused on the sale of your business. This will only give buyers additional negotiating power to lower their offers if your business is not meeting sales targets or expectations.
- Consult your accountant
Most importantly speak to your accountant. The conversations you should be having include planning your financial future. Understanding your personal and corporate tax situation may also help you recognise your options with regard to deal structure.
If you’d like some advice getting your business ready to sell, contact MWM Advisory on 07 5596 9070 or email info@mwmadvisory.com.au
