Why Every Business Owner Should Prepare Their Business for a Sale
Updated: Jun 27
Do you currently own a business that you have no intention of selling in the near future? It's easy to dismiss the idea of preparing your business for a sale when you don't see the need for it. However, I'm here to tell you that even if selling is not on your immediate horizon, there are compelling reasons why you should still consider preparing your business for a potential sale. In fact, taking proactive steps to get your business sale-ready can strengthen your company and contribute to its long-term success. Whether you're contemplating an exit strategy or simply want to future-proof your business, read on to discover why preparation is key and why you should start taking action today.
🔸 In the past, businesses would prepare for a sale and then enter the market. However, in today's business landscape, every business is essentially on the market. This means that opportunities can arise at any time, presenting the potential for a lucrative sale that you may not have anticipated. 🔸 I have personally witnessed business owners feeling flattered and excited when a reputable company expresses interest in acquiring their business. Unfortunately, I have also seen these owners experience substantial financial losses. The reason behind their losses is simple: they were not adequately prepared.
Major problems for unprepared owners: ✘ Disappointment: Without a clear understanding of their company's value or the mechanics involved in valuing a business, owners often have unrealistic expectations. This can lead to emotional turmoil and disappointment when the actual value falls short of the imagined value. ✘ Underestimating the selling process: Selling a business is a complex process that can take several months, depending on the circumstances. During this time, owners find themselves consumed with gathering and organizing paperwork, leaving them unable to focus on the rapidly changing market dynamics. As a result, the performance of their business suffers, ultimately leading to a lower sale price. ✘ Sub-optimal value: Owners who are unprepared for a sale often have no idea how to increase the overall value of their company. Buyers will evaluate the business based on its current risk and performance, leaving little room for last-minute improvements. Addressing value-reducing risks or issues takes time, which owners often don't have when they rush into a sale unprepared. ✘ Emotional strain: Facing the urgency, many owners will prefer to keep the sale process confidential and avoid involving their employees until the last possible moment. This can be emotionally draining, causing unnecessary stress and anxiety for the owner, as well as potential disruptions within the company. ✘ Lack of control: Without proper preparation, the due diligence process can uncover issues that either result in a reduced offer or create contractual obligations that haunt the seller long after the sale. Even with the help of seasoned M&A advisors, these issues can be challenging to resolve, leading to a substantial loss in value.
This is where EquityBuilder comes in. By utilizing the services of EquityBuilder, you can regain control and be well-prepared, even when faced with a professional buyer. You no longer have to wait for an opportunity to come knocking; instead, you can approach buyers who will truly value your business and maximize its worth.
With EquityBuilder, you have the power to:
✔ Set a target value for your business and have the time to still take the necessary actions to achieve it.
✔ Avoid being at the mercy of a buyer's calculations and negotiate from a position of strength.
✔ Reclaim the time and effort invested in preparing your business through a smoother and faster sale process.
✔ Instead of letting an emotional roller coaster control you, maintain composure and authority.
Furthermore, through the preparation process, you will:
🔹 Develop financial discipline and gain a deeper understanding of the metrics that drive your business's success.
🔹 Make informed decisions in the short and long term, ensuring the long-term viability and future-proofing of your business. 🔹 Address any past issues or deal breakers that may negatively impact your business's valuation going forward.
🔹 Resolve these matters and make the right decisions for the future.
Selling a business is not a common occurrence for most owners or shareholders. Therefore, it is crucial to make it a memorable and successful experience. With the assistance of EquityBuilder, you can achieve just that. Don't leave the sale of your business to chance—take control, be prepared, and maximize the value of your hard-earned investment with EquityBuilder. ✨💼