5 Step strategy for Selling your business for good value. The sales process starts the day you first open the doors, What not to do.
Table of contents
The selling process starts early
First of all, you may never intend to sell your business you want to set up a dynasty and pass it on to the family.
It may very well happen but what if it does not? Kids aren't interested, you become unwell and want out, an early retirement is an option or you get bored with what you are doing.
Furthermore, you may look into the future and realise you are in a declining market and the time to sell is now. All of these hit me at one time so was I ready.
5 Step strategy for Selling your business starts early
Being indispensable in business is not an option
Your business should operate because of you, however, it should also operate without you.
The ability for your business to run independently of you is important in both daily operations and the future. There are uncertain times and these should be considered when you are in business.
Sometimes when you are a solo operator this may seem impossible however always include a plan B. Work with someone in the same industry and share involvements where you can. This may mean Holiday times, compassionate leave, overbooking or even when a job requires more than one person.
Most businesses with staff can build a safer front end. Take days away from the business letting others shoulder the responsibilities.
Of course, they may mess up however you will still be there to fix the problems. You can have planning days or Golf days whatever you want but make the business self-sufficient.
Too many times I see a business fold because they are a one-man business. There is nothing to sell.
Invest in your customer asset
Sometime ago a friend of mine went broke in her Aquarium business. It was a series of events that created this however there was no sale of the business. Her only return was a fire sale of the few assets that provided little value.
An opposition business called me and offered to buy her customer base, they would pay an amount that should clear her debts and leave some leftover.
It was not a happy ending, it was run as a cash business therefore she had not kept any customer details, so had no list of names, addresses, emails, or mobile numbers.
Tens of thousands of customers over the years, if properly recorded, could have been turned into real money.
Besides which she certainly did no customer base marketing which must have contributed to her demise over time.
Treat your customer base with reverence and use it often to get multiple rewards. Sales, referrals, and building a saleable asset.
Your base will return lower-cost sales and higher margins than any other marketing you can do.
Have a great online presence
If the Covid-19 period has taught us nothing else it has shown that online sales are part of our life. Online sales worldwide grew massively as people sat around with time on their hands and boredom as a play friend. What better time to shop.
Those businesses well set up for trading reaped hay whilst others closed the doors. Which are you going to be.
My daughter bought a Women's fashion store in a small walk-in capture area. The store traded quite well however it was still trading in the old ways.
The first thing was to take the time to set up online trading using software that would mix the store stock, sales program, and online store. This was not a simple process and took some weeks of work and a couple of thousand dollars to get it going.
The results came in different ways. Many of the local customers would view the online program and then come to the store asking for what they wanted. This is self-built extra traffic and took their attention away from other outlets.
Others searched for brands and styles that were not available in their local outlets whilst many just shopped online because they could.
The result is a doubling of store sales that could not be achieved with just local walk-in traffic.
A small investment in time and money has built a sales model that generates good income.
Build a social media profile
Now more than ever before it is necessary to have a social following. A lot of new business will come from both free and paid media if it is done correctly.
You should own media that suits your target audience. Furthermore you must post at least daily with ideas and trends as well as call to action promotions.
Each media has a profile and aging of the most customers suited to your products.
Facebook is now a slightly aging demographic of more conservative shoppers. However because it is far and away from the biggest based media you certainly need a presence.
Instagram (owned by Facebook) is more a female audience in the 20-55 demographic.
Not the place to market truck tyres however clothing, cosmetics, hair treatment, food outlets and certainly Baby stuff.
TikTok is currently still a younger group in the 15-20. ages interested in their little world.
Twitter is a bit academic or business profile.
Linked in is essential to every business person.
Therefore having a following on any of these, or all if you are so inclined, is essential to a business.
Finally, I suggest you use just one and do it properly post every day all year round and they will come.
Your marketing is important
Selecting a good agent or doing it yourself
Whatever you don't try and sell your own business. You will act on an emotional basis and oversell the details. Believe me I have tried it and had my wife yelling in the background “you are overselling the details”
I also fell for the trap where my agent would recommend a buyer then pass him to me. Same thing, emotional sell instead of a formatted sales promotion based on benefits to the buyer.
Approach a couple of agents and solicit their ideas and importantly price. Then make a decision based on what you want, however being realistic on values and any give away.
Be prepared for the vendor finance request. This is something I would never entertain because it is so full of traps. If they mess up the business and then refuse to pay, you are left without a business and money. Don't be the bank, be the vendor and let them borrow elsewhere. Besides If they need finance are they able to run the business?
5 Step strategy for Selling your business for good value by Peter Hanley
