How to groom your business for sale
Grooming a business for sale is not something to be done at short notice and a time-frame of at least two years should be built in if the process is to have maximum effect.
The importance of grooming cannot be overstated. The aim is not to ‘window dress’ a business, but to ensure it is fit to be marketed in much the same way as an athlete is fit to enter a lengthy and testing event.
This means any issues that could detract from the value are resolved well in advance so that the business will stand up to the close scrutiny of a potential purchaser’s due diligence team.
Identifying probable purchasers and tackling the issues most likely to concern them is another crucial element of the grooming procedure.
It is also important to ensure the business is soundly managed, while demonstrating a track record of solid profitability, along with a business plan that projects growth beyond the expected timing of the sale.
Efficient management of working capital and positive cashflow will always impress potential buyers. They will additionally want to see evidence of sound customer relationships that are free from product or service quality problems.
Finally, it is essential to resolve any tax issues, as well as environmental, health and safety, regulatory and pension concerns.