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Keeping your doors open is an achievement in itself, and building the business sufficiently enough to be able to sell it at a good price is even better.

Owning and operating a small business is often-times a tenuous pursuit, somewhat akin to walking a tightrope in gale-force winds, above a school of sharks, blindfolded.

Fundamentally, keeping your doors open is an achievement in itself, and building the business sufficiently enough to be able to sell it at a good price is even better.

If your exit plan is, in fact, to make a fair chunk of cash by divesting to a willing buyer, there are plenty of things you can do, even from the outset of your business, than can help maximise your eventual lump sum.

1. Think well in advance

Chartered accountant Jason Pyke says a key driver to obtain the best price is by thinking “well in advance”.

“As with most things in life -- the quality of preparations will determine the quality of results,” he says on the Vale & West website. “Typical lead times are between 3 to 5 years prior to sale completion.”

“Preparation involves many factors -- not just financial -- that are often overlooked, but these will be obvious to prospective buyers.”

“It is not just about window-dressing the financial statements and having a quick tidy up around the premises,” Pyke says. “Attempts to present such a façade stick out like sore thumb. A sale will be lost if your integrity is in doubt.”

2. Open the books

Management consultant Robert Okabe underlines however that financial statements are, in fact, among the first things a buyer will examine closely.

“The statements’ integrity is a lynchpin of a successful sale of your business,” he says in an article on the Entrepreneurship.org website.

“You should have at least the most recent two full fiscal years of your books audited and more if your company has been around for more than five years. Complete the audits before beginning the sale process so you can correct any serious problems.”

“Don’t try to hide or cover up things; there are legal implications if you do,” Okabe says.

“Don’t expect to dodge the audit bullet if the purchaser of your firm is privately held. Many private companies will use bank financing to complete an acquisition, and lenders often require audited statements for deals they finance.”

3. Be patient

“The most important part of selling a business is patience,” chartered tax advisor and solicitor Phil Mitchell writes on the Small Business UK website.

“Selling takes time. It is important for the owner to continue to operate the business as if it was not for sale, as well as to understand that businesses do not sell overnight and many deals fall through.”

“You will have a timeline in mind for a sale, but timing is generally dictated by market conditions,” Mitchell says. “The best indicators of when to sell are the financial climate, potential buyer profiles and market trends.”

“Begin with your ultimate goals – the price you wish to achieve and when you want to sell – and then work backwards to how you are going to get there.”

 

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