45% of owners would sell their business tomorrow for the right money. Unfortunately in any 12 month period only 20% of businesses on the market actually sell and businesses that go straight to market sell for only 70-80% of the original asking price. The main reason for failing is due to lack of planning, research and organisation.
There is so much more that goes into selling a business than putting an ad in a “business for sale’s database” and having the right lawyer and accountant advising the owner.
A lot of people do just that without any thought to how the business is going to attract the right buyer.
Before embarking on selling a business, several things must be taken into consideration. Research and analysis must be done, and a business plan must be prepared. A business plan is required if you are selling a business because the potential buyer wants to know exactly what he will be investing in, and that he will get its money back. Business buyers are taking a risk so they want to be assured that your business has at least a 90% chance of being successful without you at the helm. A well written business plan will outline every aspect of the business and give the buyer a clear picture to help them in their investment decision. It will also help you to set realistic goals and objectives, and set yourself and your business up for a successful transition. This is a document that should be updated quarterly or at least when circumstances change.
Your business plan should include:
1. The Executive summary
In this section you should cover briefly the company mission statement and a summary of your visions and plans of what direction you want your business to take. It should not exceed 3 to 4 pages.
2. The Business Background
This section should include:
3. Aims and Objectives
This section should explain in deep details:
4. Products and services
This is where you have the opportunity to give a complete overview of:
5. A SLEPT analysis
In the introduction give a short description of the Social, Legal, Economic, Political, Technological environment of your business. For each element of SLEPT explain the risks they represent to your business and how you are mitigating them.
6. The Market
Describe in great details:
7. A detailed SWOT analysis.
SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal. Opportunities and threats are external.
Appendix A: Detailed financial plans :
This section should show:
Appendix B: Management Team CV’s
You will need to include for each member of the management team their profile and skills, a brief career history, their major accomplishments
Appendix C: Business model overview
Our partners at Keyso Global are using the following 9 boxes to help companies reviewing their business models
Appendix D: Risk assessment of the business
Review the risks associated with each driver of your business’ potential growth and how you will mitigate them.
Selling a business is a lot of hard work. The overall success of a smooth business transition to a new owner depends on the groundwork that you lay in to prepare your succession and protect the growth potential of your business. Your hard work will pay off when you have started a new phase of your life, customers continue to patronize your business, the company’s books show a profit, your employees have kept their employment, and you are able to afford a comfortable life after business thanks to the net proceed of the transaction.
Are you curious about how sellable your company is and what you would need to tweak to sell it when you’re ready? Then it’s time to get your Sellability Score via the questionnaire on our website. It takes about thirteen minutes and your responses are kept confidential. Complete the The sellability Score Test Now!
If you would want to know more on how to transition out of your business and would want to explore what you should do please do not hesitate to call Jean-Bertrand de Lartigue on +44 1656 766 363 or e- mail him at firstname.lastname@example.org