If you’re approaching retirement, or are simply looking to pursue a new direction in your career, you might be embarking on the journey of selling your business.

In our experience, selling a business is usually a huge learning curve for owners who have never done it before.

The process of preparing your business to make it as appealing as possible for potential buyers is perhaps the most crucial stage of a sale. Depending on the market, the size and scale of your company, and your own timeline, the preparation period can take around three years – sometimes more.

In this article you will learn about:

• The core metrics that buyers typically look at
• Why taking your time is so important from a buyer’s perspective
• How working with a team of professionals could help you achieve a sale at your desired price point.

Let’s dive into these three simple ways to make your business more appealing to potential buyers.

1. Focus on the data

One of the biggest challenges for business owners looking to sell up is that you need to be able to view your company from an outside perspective.

But for many years, you have lived and breathed your business, often making it difficult to be objective.

A helpful tactic to employ when seeking to be objective is to focus on the data. Key metrics that potential buyers typically look at include:

• Profit margins. Of course, this is a core component for buyers – if your business is reliably generating profits, and the margins look comfortable, this is extremely attractive.
• Staff turnover. Have you looked at your staff turnover through an entirely objective lens lately? It may be helpful to do so. The figures tell a story of how you manage the company and whether employees are satisfied, all of which may influence a prospective buyer’s decision.
• Future viability. If your business is part of a fast-paced industry or profession, have you considered its long-term future viability? And if so, are you taking measurable steps to help the company adapt? Actions speak louder than words here – so whether it’s investing in more advanced technology solutions, expanding your team, or updating your marketing, make sure you’re visibly future-proofing your company.
• Online presence, including reviews. We’ve previously explored why soliciting online reviews from customers is so important, and how to ask for them. To a buyer, a positive online reputation signifies a loyal customer base that can continue to generate business.

When readying your business for a sale, try to remain focused on the above data points. This approach could prevent you from attaching any sentimentality to your preparations, and may ensure you have time to improve areas that appear to be lacking.

2. Don’t rush the sale

Once you have decided that you’re going to move on, either entering into retirement or taking on another project, it can be tempting to rush through the sale process.

However, this could be unwise for several reasons, including:

• Buyers could be put off by your haste. If you seem overly eager to hook in a buyer and seal the deal, potential new owners could consider this a red flag.
• You could miss crucial details. Preparing your business for a successful sale requires a detail-oriented approach to your financial records, staff turnover, marketing, HR, and online advertising strategies. It’s impossible to ready each of these aspects for a successful sale quickly – these things require time and plenty of patience.

As such, it may help to focus on finding an appropriate buyer at the price you want, rather than how quickly you can pack up and move on. From a prospective new owner’s point of view, your interest in finding the right person might be more attractive and garner more trust than an entirely finance-focused approach.

3. Work with a team of experienced professionals

Putting your business in an attractive light for potential buyers can be challenging – especially if you have a competitive asking price in mind.

And, crucially, appearing disorganised or unprepared may illicit a negative reaction from potential buyers.

So, it may be extremely beneficial to work with a team of professionals whose sole aim is to deliver a successful sale at a value that works for you. This team might feature:

• An accountant to assist with financial preparations
• A solicitor to handle the legal side of the agreement
• A consultant who can work with you on managing any property and other assets involved in the sale
• A specialist tax adviser who can provide input into the structure of your deal
• A personal financial planner whose job is to ensure you maximise the opportunities of the windfall when it occurs, including managing your investments and helping you to plan for a prosperous retirement.

Having these professionals on your side could help to ensure that all the necessary due diligence is conducted over a time frame that suits both you and your potential buyer.

What’s more, your buyer may be able to liaise with some of these individuals directly, making the entire process smoother for everyone involved and removing some pressure from your shoulders.

If you wish to learn more about retirement planning, including readying your business for a sale, download our free guide covering everything you need to know.

We are specialist financial planners who dedicate our time to helping business owners like you manage your personal finances before, during, and after a successful business sale.

For bespoke guidance, email us at clients@iqf.ie, or call 353 71 915 5560.

Please note

This article is for information only. It does not constitute advice.

It describes financial planning services that iQ Financial can offer to you. Financial planning services are not regulated by the Central Bank of Ireland.

iQ Financial is not a tax adviser and tax advisory services are not regulated by the Central Bank of Ireland.