You are considering selling your company – the business you’ve been nurturing for so many years. In today’s ultra competitive deal landscape with multiples at near record levels, it is important to be as prepared as possible for the sell process.
Prepare your business for sale the same way you would prepare your house for sale – by taking care of red flags before you put your business (house) on the market. Buyers are wary of businesses that require too much work and investment – outdated or insecure systems, inefficient operations and manual processes that require substantial investment (both time and money) can scare away buyers. Private equity investors, in particular, want businesses that will provide a strong return on investment and gravitate towards businesses with low operating costs and scalable systems (businesses with “good bones”). Much in the same way most home buyers gravitate towards homes that show they’ve been well taken care of and have potential to appreciate with time – not homes that show signs of structural or water damage.
I recently wrote an article on the key technology and operational areas that sellers should examine before trying to sell their business. Assess your IT and operations honestly and invest a little time and money upfront to remedy any problem areas before putting your business on the market. Your efforts will be reflected in the purchase price.