Forbes author Keith Gregg’s, February 8, 2019 article, “Using Tech to Enhance and Sell a Business,” has a range of interesting ideas that business owners should explore and embrace.  Gregg looks at three big ways that business owners can use technology to help them get the most out of the sale of the business.  He explains how important it is to address these three areas before placing your business on the market.

Upgrading Systems

The first tip Gregg explores is to upgrade systems.  Upgrading systems can be particularly important for attracting younger buyers.  It is common for businesses to be successful without proprietary technology or procedures, but that doesn’t mean that technology should be ignored.

Important information should be digitized, as this data will be vital for the new owner to grow the business over the long haul.  Incorporating software that can track and analyze data across the business is likewise valuable. Using software, such as customer relationship management and financial management software, will showcase that your business has been modernized.

Business Valuations

Determining the value of your business can be tricky and laborious.  Gregg recommends opting for a business valuation, as he feels, “business valuation calculations can remove much of the guesswork from the process.”

You should expect a business valuation calculator to include everything from verified data on comparable business deals, including gross income and cash flow figures and more.  There are even industry-specific calculations that can be used as well. The main point that Gregg wants to convey is that business owners should use tangible and proven data to sell their businesses.  Like upgrading systems appeals to younger buyers, the same holds true for using verified data to sell.

Take Advantage of the Digital Marketplace

Gregg’s view is that perhaps the single greatest technology for business owners to leverage is that of the digital marketplace.  Sites that link businesses with prospective buyers can help to streamline and expedite the sales process. Through such sites, it is possible to go deeper than a specific industry and even explore sub-sectors, thus enhancing the chances of finding the right buyer.

Technology can be used to help sell businesses in a variety of ways.  An experienced and proven business broker will leverage a whole range of tools to assist business owners when selling their businesses.  When you opt for a proven business broker, you can expect to receive offers from serious and vetted buyers and, in the process, save a great deal of time while maintaining confidentiality.

Copyright: Business Brokerage Press, Inc.

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The time you spend evaluating your company’s weaknesses is, as it turns out, one of the single best investments you can hope to make.  No one should understand your company better than you.  But to fully understand your company, it is essential that you invest the time to understand your company’s various strengths and weakness.

Your company, from the beginning, has been an investment.  It’s an investment in your time, your mental energy and, of course, your financial resources.  The time and effort you expend to locate, understand and then fix your businesses’ weaknesses is time very well spent.  Addressing and remedying your businesses’ weakness will not only pay dividends in the here and now, but will also help get your business ready to sell.  Let’s turn our attention to some of the key areas of weakness that can cause some buyers to look elsewhere.

An Industry in Decline

A declining market can serve as a major red flag for buyers.  You as a businessowner must be savvy enough to understand market situations and respond accordingly.

If you spot a troubling trend and realize that a major source of your revenue is declining or will decline, then you must branch out in new directions, offer new goods and/or services, find new customers and also find new ways to get your existing customers to buy more.  Taking these steps shows that your business is a vibrant and dynamic one.

You Face an Aging Workforce

It has been well publicized that young people, for example, are not entering the trades.  Many trades such as tool and die makers will be left with a substantial shortage of skilled workers as a result.  No doubt, technology will replace some, but not all, of these workers.

This is an example of how an aging workforce can impact the health and stability of a business.  If your business potentially relies upon an aging workforce then it is essential that you find a way to address this issue long before you put your business up for sale.

You Only Have, or Primarily Rely Upon a Single Product

Being a “one-trick pony” is never a good thing, even if that trick is exceptionally good.  Diversification increases the chances of stability and can even help you find new customers.  Additional goods and services allow you to weather unexpected storms such as a supply chain disruption while at the same time provide access to new customers and thus new revenue.

The Factor of Customer Concentration

Many buyers are concerned about customer concentration.  If your business has only one or two customers, then your business is highly vulnerable and almost every prospective buyer will realize this fact.  While it is an investment to find new customers, it is well worth the time and money.

A business broker can help you evaluate your company and, in the process, address its weaknesses.  Remedying your businesses weakness before you put your business up for sale and you will be rewarded.

Copyright: Business Brokerage Press, Inc.

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In a recent Divestopedia article entitled, “Kids Take Over the Business? 8 Things to Consider,” author Josh Patrick examines what every business owner should know about having their children take over their business.  He points out that there are no modern and accurate numbers on what percentage of businesses will be taken over by the children of their owners.  But clearly the number is substantial.

Patrick emphasizes as point number one that allowing a child to take over a business right after finishing his or her education could be a huge mistake.  After all, how can a parent be sure that a child can handle operating the business without some proven experience under his or her belt?

Point number two is that businesses frequently create jobs for the children of owners.  The flaw in this logic is pretty easy to see. This job, regardless of its responsibilities, isn’t in fact a real job.  Senior decision-making roles should be earned and not handed out as a birthright. The end result of this approach could create a range of diverse problems.

The third point Patrick addresses is that pay should be competitive and fair when having children take over a business.  Quite often, the pay is either far too high or far too low. This factor in and of itself is likely to lead to yet more problems.

Business growth must always be kept in mind.  When having your children take over a business, it is essential that they have the ability to not just maintain the business but grow it as well.  If they can’t handle the job then, as Patrick highlights, you are not doing them any favors. Perhaps it is time to sell.

Another issue Patrick covers is whether or not children should own stock.  If there are several children involved, then he feels it is important that all children own stock.  Otherwise, some children will feel invested in the business and others will not. In turn, this issue can become a significant problem once you, as the business owner, either retire or pass away.

In his sixth point, Patrick recommends that a business should only be sold to children and not given outright.  If a child is simply given a business, then that business may not have any perceived value. Additionally, if a child or children buy the business, then estate planning becomes much more straightforward.

In point seven, Patrick astutely recommends that once a parent has sold their business to their child, the parent must “let go.”  At some point, you will have to retire. Regardless of the outcome, you’ll ultimately have to step back and let your children take charge.

Finally, it is important to remember that your children will change how things are done.  This fact is simply unavoidable and should be embraced.

Working with an experienced business broker is a great way to ensure that selling a business to your child or children is a successful venture.  The experience that a business broker can bring to this kind of business transfer is quite invaluable.

Copyright: Business Brokerage Press, Inc.

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Putting your strengths first will help you sell your business.  While this may seem obvious, a surprising number of business owners will either improperly index the strengths of their business or fail to emphasize those strengths adequately.  In this article, we will examine five key business strengths that you should focus on when it comes time to sell.

Understand Your Buyer

You know your business, but you don’t necessarily know what buyer is best for it in the long run.  If you’ve never sold a business before (and most business owners haven’t), then you may not know how to best position and present your business for sale.

A business broker is immensely valuable in this regard.  These professionals are very good at determining which prospective buyers are serious and which ones are not.  Additionally, a business broker will use their own databases of prospective and vetted buyers and try to match your business up with the prospective buyers that are most likely to be a good fit.  When dealing with a buyer, a seasoned business broker will put emphasis on your strengths whenever possible.

Be Sure to Maintain Normal Operations

Selling a business can be very demanding and underscores, once again, the value of working with a business broker.  A business broker will focus on selling your business so that you have more time to focus on the day-to-day of running your business.

The last thing you want is to waste your time on buyers who are not serious.  Remember, if your business suffers as a result of the time you spend away from your business in the sale process, then the value of your business to prospective buyers could suffer.

Determining the Best Price

If you incorrectly price your business, you could dramatically reduce the interest.  Business brokers are experts at pricing businesses and can help you determine the best possible price.  Many business owners have unrealistic valuations and others may even undervalue their businesses or they fail to incorporate all aspects of their business.  Working with a professional business broker can help you quickly achieve the best price.  The best price possible will work to maximize the strengths of your business.

Getting Your Business Ready for Sale

There is a lot that goes into getting your business ready to sell.  The simple fact is that getting your business ready to sell isn’t a one-dimensional process, but instead involves every aspect of your business.  Getting your business ready to sell isn’t about making it look presentable and putting a “new coat of paint” on things, although this is a factor.

Instead it is necessary to have every aspect of your business in order.  From paperwork such as tax returns, contracts and forms to a business plan and more, it is important to consider every aspect of your business.  You should consider what you would want to see if you were the one looking to buy the business.  Be sure to do everything possible to build up your strengths.

Confidentiality

If word gets out that your business is up for sale, there could be a range of problems.  Employees, including key management, could begin looking for other jobs and suppliers and key buyers could begin to look elsewhere.  In short, a breach of confidentiality could lead to chaos.

Getting your business ready for sale means factoring in the strengths and weakness of your business then fixing weaknesses whenever possible and building upon your strengths.  Working with a business broker can help you address every point covered in this article and more.

Copyright: Business Brokerage Press, Inc.

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