12 Jun Around the Web: A Week in Summary
A recent article from Divestopedia entitled “Should You Hire a Sell-Side Advisor or Do it Yourself?” explains the reasons why hiring a sell-side advisor is the best way to achieve optimum outcome in the sale of a business.
Many business owners try to avoid hiring an advisor in hopes of saving money and time. The reality is that not hiring an advisor can cost you these exact things. Sell-side advisors are experts in representing and assisting companies who are actively looking to be acquired. What this means is that they have the experience and knowledge necessary to make sure that you receive a favorable deal for your business.
Common reasons why hiring an advisor is beneficial are:
- Selling a business properly is very time consuming. If you’re currently running a company, it can take you away from the business and the business could suffer.
- Advisors make the process more efficient. Since they do this for a living they know what steps to take, what to avoid and how to be achieve the desired outcomes.
- Sell-side advisors optimize the value of your business on the market.
A recent article from The Business Journals entitled “Follow these three strategies to help make your business more valuable” explains the three common value drivers that business owners overlook.
While it’s easy to know the value of your business based on the selling prices of other similar businesses or from a valuation, it’s different to understand what makes up this value. For many business owners, their wealth is tied up in their business and therefore being able to drive this value up is important.
Three of the best ways to increase the value of your business are:
- Create recurring revenue – Subscription based services and goods are valuable because it makes profit projections easier and more accurate. The dependable income is a very appealing factor for a potential buyer.
- Focus on building your brand – Having a recognizable brand means that customers are more likely to purchase your product over other brands and this makes your company very valuable.
- Create a business that can run without you – If you’re the reason that your business is running smoothly and making all of its sales, then as soon as you leave, so does much of the company’s value.
A recent article from The Denver Post entitled “Gary Miller: Sooner or later you will probably want to sell your business” explains how business owners can be prepared for this inevitable chapter of their lives.
For a wide range of reasons, eventually the majority of business owners come to terms with the fact that it’s time to sell their business. Unfortunately, many of them are also lacking in the necessary preparations for making this step possible. When buyers or investors look at businesses they are looking for a story of growth and for specific metrics that drive value in their potential investment. As a business owner, before going to market it is your responsibility to write this story as cohesively as possible. Preparing your business for sale is your opportunity to connect with a buyer, build trust and hopefully achieve your desired outcome.
Achieving your goals as a business and building a growth story do not always have to mean growing the business’s size. Oftentimes it means improving cash flow, reducing overhead, smoothing out processes and business relationships, and making the company more efficient and profitable. In order to successfully meet these markers requires making a growth plan and understanding why each of the dynamic pieces are relevant and valuable.