Starting a business is a BIG deal. Building it to become more than your hobby is even bigger again. In fact, building your business into an asset may result in it being possibly the largest asset you’ll ever own, or second maybe to your home. So what about when you want to Sell your Business, what then? As discussed on Westpac’s Ruby Connection…
If trying to sell it is what you eventually want to do, then get strategic about WHAT it is you’ve got, how it is someone else could do it and therefore who that special someone might be that will love it as much as you once did. Think about it this way, would you put your home on the market without a little thinking and TLC-driven renovation first? so…
What is the “story” of your Business?
Why did you start it? Who was involved? Are they still with you? What happened to them? How is it legally structured ie Pty Ltd, partnership, sole-trader? Why the Business name? Is it registered? Any trademarks/patents? How long has it been going? Does it look today like you envisaged when you started? Is there still a need for what your Business does? And why? Why should someone love it like you once did?
The evolutionary history, as well as its current story, is all-important.
What does your Business sell?
List everything; not just the features, but the benefits to your consumers as well. Why do your consumers buy from you? Did your Business always do what it currently does? If not, what did it start out doing? What happened? Why did you stop? Why the change of direction? Why the current choice? What other options are open in your market that you haven’t done yet? Who else does what you do?
What financial records does your Business have? (eg: Tax Returns and BAS)
Profit – that’s what a buyer wants to know about. To “prove” that requires “real” paperwork, not just what you can pull out of a financial software package. ATO tax returns and submitted BAS’s, Certificates of Currency for insurances, and reports of any forecasting done is what they’re after. This paperwork is very important to a prospective buyer because that’s what they will base a lot of their “valuation” decisions on. These records provide evidence that your Business is a worthy asset.
Starting with the end in mind TODAY, regardless of how old your business is, means you can start to, slowly but surely, gather and assemble the answers to each one of these questions, to be able to convey to a potential buyer WHAT it is they are buying…
- Business Planning in Reverse! – Why Start with the End in Mind?
- Ready to SELL your Mother of a Business?…
- Going out with a Boom Boom…PrimeTimers
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