During every business owner’s journey, they’ll reach a point where they want to move on from their business, and for many, that means selling up. But where do you even start?
Selling a business can be stressful and complex, so I wanted to look at the things you can do to ensure the process runs smoothly from start to finish.
Build a brand bigger than yourself
For many small businesses, one of the selling points to customers is that they know the face behind the brand, but that doesn’t always make the sales process easy. If your brand is built completely around you that could create a real barrier for growth, and could easily put a buyer off, as once you go, what is the company’s USP?
My suggestion here would be to remove yourself as the face of the brand as early on into the sale decision process as you can. Change your messaging and communications from being ‘from (you)’ to ‘from (the brand name)’.
Build a strong brand
One thing that’s important to every business is to have strengths beyond its balance sheet. Aspects like a solid online presence with a well-optimised website and active social media channels are all incredibly valuable assets during the sales process as they will only increase the value of your business.
Every business owner knows the importance of routine and order, and when it comes to selling your business things are no different. This step is vital not only at the end of your business journey but at the start too. Create processes that will last.
The information that the business is built on needs to be down on paper. Take every single process that the business uses. From how you invoice, to how you create a new campaign. Every decision you make needs to have a system and a process. The best way to do this is to create a standard operating procedure (SOP) which you can share with your team for their input. For every document that your business puts out to clients, create a template and use that every time you start a new document. This not only saves you time now but creates a scalable business process allowing you to expand and not lose the basis of the brand. Make these documented processes the baseline of your work and create a well-oiled machine that someone would be lucky to own.
When contemplating the sale of your business go back through all your processes and update them where necessary to prepare everything for a potential buyer to look over. This can remind the buyer why they are buying your business, and in many cases can reduce the risk of your deal falling through due to unorganised and chaotic paperwork. Organising the small things often demonstrates that the big things like finances have been done carefully and strategically with long-term thought in mind.
Document and share tacit knowledge
My previous point relates to the organisation of physical documents, processes, and information, but now I’m looking at tacit knowledge. Although it’s not something you can see, it’s vital to your business, and the sooner you can pass it on the better footing you’ll have in the sale.
Tacit knowledge – is knowledge that is difficult to express or extract, and therefore more difficult to transfer to others by means of writing it down or verbalising it. This can include personal wisdom, experience, insight, and intuition.
If you have been always been the main decision-maker and leader of your business the knowledge that you have could scare a buyer off as once you go, all your knowledge goes too. For example, if you are the main user of software that is imperative to the business and are the one who does all the maintenance work on it and has picked up the most efficient tips and tricks along the way, that knowledge is tacit knowledge.
In this situation, you have two options;
The first is to pass your knowledge on to the team around you. If an issue arises rather than handling it quickly yourself, take the time to train your team, so that when you leave the remaining employees can handle it themselves.
The second is to pass on your knowledge via writing. If that same problem were to arise again create a detailed document of all the steps you take to solve it. Take all the tacit knowledge from your head and put it down on paper, which can be shared and referred to long after your exit.
Decentralise decision making
My next point follows on nicely from the last, as it involves sharing the decision-making out to other members of the team to allow for the smooth transition of your exit. If you have always made the decisions and passed them down to your team, when you leave there is likely to be a period of time of panic where no one can make efficient decisions, which could be detrimental to the new owners, your clients, and the business reputation.
Allow your employees to take ownership of their role and responsibilities as this will make the transition to new ownership much smoother, due to someone being in charge and know what’s going on in each area of the business.
If you are a service-based business this can also transfer to the passing of clients over to your employees, so that when you leave they have continuity in their point of contact at the business, and the peace of mind that their service will not be impacted by your departure.
Know exactly what you want
My one piece of advice for any business owner looking to sell up is to know exactly what you want. Not only is knowing what you want important, but you also need to know what you’re willing to compromise on.
Ask yourself these questions:
1. What does a successful acquisition look like to you?
2. Are you looking for a quick exit?
3. Or is the price most important to you?
Equip yourself with guidance and advice
One of the best things you can do is find someone to help and guide you along the way.
And that’s where Auria come in.
We can help guide you through the whole process, from deciding on an exit strategy, sorting through your processes and finances, through to the final signing off of paperwork.