You’ve spent years –or maybe decades – growing your company and now you’re thinking about selling your business.
You’ll want to make sure all of your financial affairs are in order and your operation is primed to get the maximum sale price. Maybe you want to retire after all that hard work or move onto other opportunities.
Another path to consider is a roll-up acquisition, where you buy another company in the same industry to capitalize on economies of scale – increasing your purchasing power and profits while reducing overhead.
If you’re looking for more information about how to get the most out of your business, check out Acquira’s Business Accelerator.
Here a guide to selling your business and how to start your journey.
How Entrepreneurs and Business Owners Can Maximize Their Selling Opportunities
One of your best ways to maximize is to make sure your business is as successful as it can be before you sell it. This might mean planning well in advance, perhaps a year or two ahead of time.
Make sure you’ve got all of your financial records in order and comb through that data to get a clear picture of your business’s financial health.
Once you’ve got that in hand, compare your business against industry benchmarks to see where you stand relative to your competitors.
If revenue is lagging, it’s probably worth taking a serious look at your operation to see if you can increase profitability.
You might consider:
- Retooling your marketing to bring in new customers
- Cutting any unnecessary expenses
- Assessing whether you are overstaffed and need staff reductions
- Are you spending too much on capital improvements?
- Do you have more inventory on hand than you need?
Getting all of this in order will likely determine whether you should sell your company now or once you have made some improvements.
You should also considering hiring a professional business valuator before you sell. They can help you hone in on a reasonable price that can maximize the return to you.
If your price is too low, you’ll likely get too many buyers and spend too much time entertaining offers. Serious buyers might wonder why the price is so low and move on to other opportunities.
A price that is too high will also scare off potential bidders.
You should also have a good story for why you are looking to sell your business now and one that matches with the current state of the business. Are you looking to retire? Move on to new opportunities?
Which Are The Best Ways To Sell Your Business?
There are several ways to sell your business, each with their own strengths and drawbacks. Let’s look at a couple.
Working with a broker is perhaps the easiest way to sell your business, although it is also the most expensive. If your business is valued at less than $1 million, a broker will likely charge 10-12 percent.
You might get some sticker shock at seeing that fee but a broker can help you weed out undesirable buyers quickly, rather than having you do all the leg work to weed them out.
A good broker can also help connect you with potential buyers before the sale is made public, ensuring an easy transition.
If you want to go it alone, you should consider reaching out to industry contacts to quietly see if anyone is interested.
You can also reach out to family and friends who might be interested.
Former or current employees who have an existing knowledge of the business can also make for potential buyers if they’re looking to take the next step in their business careers.
There are also several websites that can help connect small business buyers and sellers like BizBuySell,
How to Grow a Business for the Best Exit
One of the most effective ways to grow a business so you can get a higher price and make the best exit possible is to engage in a roll-up acquisition strategy.
A roll-up, sometimes called a “tuck-in,” is when a company buys another business in the same market and merges it into the existing operation.
This can allow the new entity to take advantage of its larger size.
This can help increase your business’ purchasing power, reduce overhead and increase brand recognition.
A roll-up acquisition lets you take advantage of economies of scale in your industry. You are able to boost output with a minimal increase in operating costs.
This can help dramatically increase the value of your business and, ultimately, how much you are able to sell it for.
Increasing Customers to Increase Sale Price
One possible way to increase your sale price is to acquire a similar business that has a more well-constructed B2C (business-to-consumer) pipeline.
The term B2C refers to the process of selling products and services directly between a business and consumers who are the end users of its products or services. This is a different business model than a B2B or business-to-business model.
The five types of online B2C business models are:
- Direct sellers
- Online intermediaries
- Advertising-based B2C
This guide has attempted to lay out some of the best ways to maximize your selling potential.
You should make sure all your financial affairs are in order and the business is primed for the sale with strong financial data.
Consider some roll-up acquisitions are a long-term growth strategy ahead of the sale.
You’ve worked hard to grow your business and you should get the most out of selling your business, whether that’s because you’re looking to retire or simply move on to new opportunities.
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