How to make your business “shine”
Preparing for the sale of your business is akin to the process of polishing diamonds. Just like diamonds need to be carefully cut and polished to achieve their full potential, a business needs to be groomed and polished before it can be sold for its maximum value.
It takes billions of years of tremendous pressure and high temperatures to turn the earth’s carbon deposits into the raw form of diamonds. While not billions of years, most likely your business took many, many years of hard work, patience, and maybe even some pressure, to get it to where it is today.
In this article, we’ll take a look at some important steps to take to make your business shine.
Assess the Current State of Your Business
Just like a diamond cutter assesses the current state of a rough diamond before deciding how to cut it, you need to assess the current state of your business before preparing it for sale. You need to look at your financials, management team, operations, customer base, and market position to identify areas of strengths and weaknesses.
Address Areas of Weakness
Once you have identified areas of weakness in your business, you need to address them. This could involve investing in new technology, hiring new staff, or revamping your marketing strategy. The goal is to make your business as attractive as possible to potential buyers.
Focus on Your Unique Selling Proposition
Just like a diamond needs to have a unique selling proposition to stand out from other diamonds (remember color, clarity, cut, and carats?), your business needs to have a unique selling proposition to stand out from competitors.
This could be a proprietary technology, a strong brand, or a loyal customer base. You need to highlight your unique selling proposition in all of your marketing materials and in the materials you share with a potential buyers, to make it clear to potential buyers why your business is special.
Clean Up Your Financials
Potential buyers will want to see detailed financials before they decide to purchase your business. You need to make sure that your financials are clean and organized so that potential buyers can easily understand your revenue streams, expenses, and profits. This may involve hiring a specialist to help you prepare your financials for sale.
Build a Strong Management Team
Just like a diamond needs a strong setting to shine, your business needs a strong management team to succeed. You need to build a team of managers who are capable of running the business without your direct involvement. This will make your business more attractive to potential suitors who are looking for a business that can run independently or can be easily folded into another business.
Get Your House in Order
Before you start marketing your business for sale, you need to get your house in order. This means organizing all of your legal documents, contracts, and agreements so that they are easily accessible to potential buyers. You also need to make sure that your business is in compliance with all relevant laws and regulations. The motto here is “no surprises” for a buyer.
Hire a Mergers & Acquisitions (M&A) Professional
Finally, just like a diamond cutter may hire a broker or advisor to help sell their diamonds, you may want to hire an M&A firm that can help you with all the steps above.
When selecting an M&A advisor, be sure they have experience in your industry, and that they have senior staff that have been there, done that. In other words, that they have experience as company leaders and business operators, as well as successful experience making deals.
The right team can help you prepare your business for sale, find potential buyers, and negotiate a favorable deal. They can also help you manage the sales process so that you can focus on running your business until the sale is complete.
It might help you to frame up this process by remembering that only about 30% of mined diamonds are of gem quality. The remaining 70% are sold for use in manufacturing. No amount of polishing can make an industrial diamond shine enough to be considered a gem.
You are in a unique position to start polishing your diamond, your business, now, and create a plan of action to garner the maximum value your business is worth.
Align Business Advisory Services
With Align BA’s M&A consulting services, you have a team that can advise you on the best outcome that benefits you, your business, and those that matter to you. You’ve done your part in building a successful business. Now, see the profits that await as we help you maximize your earnings and provide a sound exit plan as you transition out of your company.
Contact Align BA today to request a meeting with our team.