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Get Ready To Sell Your Business for MORE

  • Author Author Ken Payne
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  • Blog entry read time Blog entry read time 2 min read
Have a small business you're considering selling? If so, here are some helpful tips to maximize the value of your business...

handshake-2056021_640.jpgPrepare Your Business

Hopefully, you’ve kept your accounts in order, established a diversified consumer base, maximized your cash flow, and maintained your physical facilities for quite some time. If not, it’s never too late to start.

Streamline Your Accounts

Nothing makes potential buyers run like accounts that don’t hold up under close scrutiny. Now is not the time to fudge a little in order to make your business more attractive. Doing so will only make potential buyers run once they get a whiff of your dishonesty. Make sure your records are in top condition and reflect the actual financial condition of your business. Doing so now will help later on with the appraisal process.

Establish a Diversified Consumer Base

You may have the greatest product in the world, but that matters little to potential buyers if you only sell your product to one company. Spread your incoming cash flow around; according to the Business Enterprise Institute, it is important that your biggest source of cash flow not count for more than 10 percent of your revenue.i

Maximize Cash Flow

Over the course of many years, little things like your company car and other perks add up. It’s time to figure out what your company’s cash flow is really like. Stan Crow of S. Crowe Collateral recommends producing a spreadsheet that presents a more accurate view of your actual cash flow by factoring in the money spent on unnecessary expenses.ii By maximizing your cash flow, you give potential buyers a better idea of what it actually costs to run your business and how much your business actually makes.

So, in short, preparing your business in this specific area is about recognizable CASH FLOW. Since most businesses are sold to either Financial Buyers or Strategic Buyers....both care about your NET CASH FLOW. Since many buyers will use some sort of financing to buy the business...everyone will pick apart your cash flow. Use the above steps to begin to think like a buyer...then you will be a better Seller and wind up with more cash at the end of the day.

Image: CC0 Public Domain, Free for commercial use, No attribution required https://pixabay.com/en/handshake-hand-give-business-man-2056021/


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Ken Payne
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2 min read
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