How to Maximise the Sale Price of your Business

Every business owner who chooses to sell in order to exit their company wants to maximise the sale price of their business.

And rightly so.

Blood, sweat, and tears have gone into building your company into what it is today, and it is natural to pursue the best possible reward for your hard work.

But what most business owners fail to understand is that it also takes hard work to sell your business if you want the best possible financial outcome. Fail to put the work in when selling your business and you negate the hard work you have put in over previous years.

To help you get the best price for your business, here are a few things you should consider.

Who you are selling to

Selling a business is much like selling a product or service on the marketplace. You need to understand who your target market is.

Who would be interested in buying your business? Why?

Depending on your industry and the type of business you have, potential buyers could include customers, suppliers, competitors, external investors or entrepreneurs, and even internal buyers i.e. employees and/or managers.

Once you understand who you are selling your business to, then you can proceed to plan how you will make the business attractive to this target audience, and how you propose to approach them with the opportunity.

Make the opportunity attractive

If you were selling your car, would you advertise it in an unclean, untidy state?

If you were selling your house, would you allow viewings without first vacuuming and giving the bathroom tiles a good scrub?

Of course you wouldn’t.

The same principles apply when selling your business.

Tidy up any loose-ends, remove unnecessary costs, and boost sales as far as possible to make the opportunity appear attractive to potential buyers.

Inspire confidence

A hugely influential aspect, when it comes to selling your business successfully, is the level of risk that buyers perceive your business to pose.

If you can minimise the risk presented to buyers, you can maximise your chances of making the sale.

Offer to remain an employee of the business for a set period of time to help show the new owner ‘the ropes’.

You can also incorporate an ‘earn-out’ clause in the sale agreement which essentially places a proportion of the sale price under conditions of business performance. Meaning if, after the sale of your business, the buyer experiences the achievement of previously agreed financial objectives, you will receive the proportion of the sale price that was attached to the earn-out clause.

If, on the other hand, objectives are not achieved, you will not receive this proportion of the sale price.

In essence then, it provides a financial safety net for the buyer should the business performance not meet expectations.

If you incorporate all of the above measures, and negotiate well with potential buyers, you can maximise the sale price of your business.

If you would like further help and assistance with regards to preparing your business for sale, get in touch with me, Bob Brown, on 01709 810081.