Selling your business? Do this first to maximize profits!

You’ve worked hard starting your business from scratch and getting it to turn a profit, but now it’s time to sell. Whether you are simplifying your life, retiring, building another company, or just looking to cash in on a big payday, getting the best offer for your business isn’t about luck. It’s about preparation.

The goal is to maximize your profit. To do that you need to put yourself in the shoes of your potential buyer.

Buying a business is often like buying real estate. There are two types of buyers. Those who are looking for a sure thing, and those who are looking for a great deal.

If you are selling your business (or your home), you never want to be the seller of a “great deal”.

These are deals where the buyer doesn’t have to spend too much of their money, and still get a high level of potential value with the purchase. Buyers rarely spend top dollar for potential. Instead, they buy low, add the work themselves, and then profit from that potential by making it “a sure thing.”

So how do you make your business into a “sure thing,” and maximize your profit? By making it a consistent and reliable machine.

But…. my business has good cash flow now!

Yes – your business might be making money now, but is it reliable? Does your business rely on one of these to keep it going?

• A few large customers
• A couple of key “high performing” employees (to read more about the dangers of relying on high performers, check this out: Start getting the most from your workforce )
• You
• High seasonal sales

If these things disappear, does your business have the ability to keep churning out the profits? Investors sees these things as a risk, and will lower their offer price to you.

Good news! The answer is simple.

Ensuring that every part of your business runs effectively and consistently, with and without you at the helm, is the key to showing maximum value.

• Are all your processes understood by all employees?
• Do all employees perform tasks the same way?
• Can your staff produce at the same high levels if you are on an extended vacation?
• Do your sales/manufacturing/shipping/receiving/etc. processes work and look the same every day/month/year, regardless of which employee is working that day?

If the answer to any of the above questions is “no”, then it’s time to focus on the smaller details of your processes. Follow these three steps:

• Write down every small step to your major processes
• Validate that these steps are indeed being done by all staff
• Utilize your leadership group to hard wire these steps

Enjoy the fruits of your hard work

When everyone in your business is performing consistently and reliably, staff becomes engaged, costs become lower, production becomes more efficient, and your business will be maximizing its value, which will give you the most return.

You’ve worked too hard to grow your business – don’t let significant value walk out the door. You might even decide that you like the increased efficiencies and profits too much to sell!

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