Alarmingly 90% of SME businesses don’t sell anywhere near the amount their owners want, need or expect- or even worse, they don’t sell at all. With over two million businesses in Australia, you need to take actions today to ensure you don’t fall into this statistic.
As a “Profit Coach” I’m regularly asked what can I do to ensure this doesn’t happen to my business, and this is what motivated me to write this article.
To begin with, we need to ask the simple question, why does this happen?
The answer is that the owner and the business were not ready to sell when put onto the market. They had not properly prepared their business for sale and all too often we see businesses put on the market for emotional, not strategic reasons. To further complicate the matter, research suggested that in general, SME owners have inflated views of what their business is worth.
If you want to make a significant profit on the sale of your business, and DON’T forget this should be one of the principle reasons for being in business, then it has to be prepared for sale well before it is put on the market. This is what I call being “sale ready!”
So when is the right time to start preparing my business for sale? If you were starting a business today I would say you should start with the end in mind by preparing your business for sale from day one. If however, like most business owners you have been in business for some time, I would start now as the process can take anywhere from two to five years. Don’t make the mistake and wait until you’re ready to sell. TODAY is a good day to start.
Having your business ready to sell provides the business owner with options as “a business ready to sell is also a good business to keep.” And a business sale ready is worth a lot more than one that is not, and is also a lot more profitable.
My definition of a business being sale ready is “a business where a prospective purchaser sees value in your business, and is prepared to pay equal to or greater than what the owner expects.” The true value of a business is determined by the purchaser, not the vendor, so to maximize the value received for your business, you have to think like a purchaser and not an emotional vendor. This requires a mindset shift.
So you now know you should have your business sale ready and should start now, but don't know where do you start? I would make two recommendations, firstly contact Simply Business to obtain copy of my white paper “Profit is not a dirty word” which will provide you further useful information, in particular information about what a sale ready business looks like and how prospective purchasers think.
Secondly I would suggest if exiting your business is on your mind, then undertake our complimentary sale ready audit which will show you where the gaps which need to be bridged are, as this will assist you to make a significant profit from the sale of your business. Something I believe is the ultimate prize for being in business and can only be obtained once.
I trust you enjoyed this article and hope it has prompted you to think differently about your business and most importantly to start the process of making your business sale ready now.
For a copy of my white paper “Profit is not a dirty word” or for a copy of our sale ready audit please simply contact me on;
Simply Business Australia
Philip Coombs “The Profit Coach”
0419 834 678