11 Apr Around the Web: A Week in Summary
A recent article posted by Northern Nevada Business Weekly entitled “Top 10 things business owners should know before they sell” offers business owners key tips from the perspective of a business broker who has seen the good and the bad of business transactions.
- Plan ahead, know the value of your business, and start exit planning 3-5 years before you want to leave.
- Keep your books in order and make sure your financials are up to date to ensure you get the maximum price when selling.
- Get rid of excess or unused inventory and sell outdated assets so it does not negatively impact your sale.
- Make sure all contracts and agreements with customers, suppliers, or manufacturers are current, transferable and in writing.
- Diversify your customer base so you don’t have a large customer concentration, which may negatively affect the value of your business.
- Stay up to date with technology and changes in your industry.
- Don’t overleverage your business. If you’re in a growth pattern this can be tricky but exit planning can help you make sure you have enough left after you sell.
- Assemble a great team of trusted advisors such as a CPA, financial advisor and business broker.
- Find the right time to leave your business.
- Enjoy life by planning your retirement ahead of time!
Click here to read the full article.
A recent article from the Axial Forum entitled “5 Ways Sell-Side Customer Diligence Can Maximize Sale Prices” explains how third-party sell-side customer diligence has become increasingly more common and why it can help sellers maximize and justify sale prices. Here are the 5 ways this due diligence can help you get the best sale price:
- Determine if it’s the right time for a sale – Positive customer feedback can help reinforce the decision to sell, and neutral or negative feedback can help improve the company so it will be better prepared for a sale.
- Attract and persuade buyers – Your confidential information memorandum (CIM) will show how strong customer relationships are, how your market share has grown, how the business has become more competitive, and more. Thorough documentation of the health of customer relationships will also help attract buyers.
- Control the message – Having the seller contact their customers reduces the risk of anyone being tipped off about the sale and also allows for the seller to provide a better interpretation of the results.
- Prove there is a clear path for future growth – Pre-sale due diligence can help justify the ways in which the company can grow in the future.
- Accelerate the timeline – Having customer diligence done ahead of time will speed up the process so the buyer doesn’t have to do it.
Sell-side due diligence gives the buyer a good overall assessment of customer relationships while also allowing the seller to control the process of the findings and substantiate their asking price.
Click here to read the full article.
A recent article posted by Transworld Business Advisors entitled “You’ve Bought a Business, Now What?” gives advice on what to do after you’ve purchased an existing business. The first step is to create an open line of communication with your employees. This will help you learn about the day-to-day practices and also help you build trust with your team. This transitional period is a good time to learn how the business works and start creating an action plan without making any drastic changes too soon.
When you first start to implement new ideas or changes, be sure to communicate them with your team and also listen to them if they have new ideas or suggestions. When you are ready to implement something new, the process will go much smoother if your managers and employees are on board. An experienced business broker can also help you with the transition process and advise you on the best way to work with employees through the transitional period.