How to Get Top Dollar When You Sell Your Business
If you are considering a sale of your business, make sure to optimize it ahead of time to get the best sale price, says Charles Weaver, president of the MSPAlliance, who also consults with MSPs on M&As through his firm Weaver & Associates. Here’s a list of simple steps you can take today to ensure you get top dollar for the business you worked so hard to build.
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Don’t just sell without a plan of where you want to work after your business belongs to someone else.
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Do consider what’s next for you. If you sign a three-year non-compete agreement, you will be limiting your options. Also consider whether you want to sell to a company that would hire you post-deal, and make that part of your negotiation.
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Don’t put yourself on the market without taking steps to improve your business’s valuation.
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Do focus on increasing profitability and reducing expenses that run through the business.Do hire a CPA to get your books in tip top shapeDo document the businesses processes.
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Don’t be afraid of the increased tax liability that comes from increasing your profitability.
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Do realize you will make that increased liability up in the sale price of the business and then some.
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Don’t be the single point of failure or success for your business.
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Do put processes in place that enable your business to run without you.
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Don’t run up a bunch of debt.
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Do pay down debt and avoid litigation.
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Don’t put off planning for your business’s sale.
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Do start work to optimize your business’s value three years in advance of putting it on the market if you know that’s what your plan is.
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Do engage with a broker who knows your business model and can help you increase your valuation and connect you with the right potential buyers.
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Do take action. It’s easy to put off taking these steps when you are busy running your business day to day. But taking these steps can make a big difference in your ultimate sales price.