10 Ways to maximise your profits when you sell your business

Too many business owners find themselves in a situation where they work 10-15 hours a day. They survive by slogging away, day after day, only to realize 15 or 20 years down the track that they’re not as rich as they thought they would be.

A successful entrepreneur knows when to sell his business and move onto the next venture. He knows that a business is about creating wealth as well as making an income. An entrepreneur knows that wealth comes from many different ventures, some of which may be profitable and some that may not. The entrepreneur most of all, knows that when it comes to selling a business, you’ve got to make the most you can. Below are a few tips that will help you when if you’re thinking about selling your business and moving onto bigger and better things.

1. Consider timing. Sell when your business is growing. You’ll get a better price. If you sell when business is down, you won’t.

2. Prepare an information package for prospective buyers with all the essential details of your business. This will help them get a clearer idea about whether they want to purchase or not and it will save you time from having to explain it to them.

3. Speak to your accountant and make sure your accounts are up-to-date. Gather all your financial information for the previous 5 years. The buyer will investigate your records and will lose confidence if the info you provide isn’t accurate.

4. Review your lease – does it need to be extended, renewed or renegotiated so the buyer has a secure tenure?

5. Review your major contracts with outside suppliers and clients. Formalise your supplier contracts and make sure that the business that your suppliers and clients bring is transferable to the prospective purchaser.

6. Review your stock – make sure you’re not carrying excess or obsolete stock. It can impact your cash flow and affect the amount you receive for your business.

7. Review your employment contracts and make sure you give your employees the necessary authority and information so that you can become redundant in your own business. Advise your staff early what will happen to them when you sell so that they make alternative employment arrangements if need be.

8. Think about what restraints you will place on yourself on competing with the purchaser of your business? What is a reasonable restraint for your industry?

9. Talk to others who have sold with success. Benefit from their experience. Or go one better and talk to a business advisor who will recommend when to sell and how to sell. This advice can make the difference between a smooth quick deal and a difficult one.

10. Figure out what comes after – do you have free time to spare or will you buy another business and start your entrepreneurial adventure?

If you would like specific tailored advice on how to maximize your profit when you sell your business, call Instant Business Success today on (02) 9411 1345 or email info@instantbusinesssuccess.com