Secrets to Selling Your Independent Business
Does the idea of selling your business keep you up at night? Does all the how-to sell your business on the internet put you to sleep? It is overwhelming.
Then do we really need to pile on another how-to blog?
Yes! Because we sifted through the mountain of web content and reduced your learning curve to a mole hill. We also coaxed a sign and graphics expert to reveal company secrets stockpiled over 40 years—tips to help you sell your business on your terms.
From the world wide web we netted the nuts and bolts of selling your business
Start with an EXIT STRATEGY. You developed business and marketing plans to build your business, you need an exit strategy plan to manage it to your end.
Calculate a VALUATION for your business. Figure a fair price based on sales, revenue, outstanding invoices, inventory, cash flow and debts.
Sell to the right BUYER. No matter whom you sell to—an entrepreneur, a family member, a friend, or a foe—make it a good fit for the business, the employees and your (former) customers.
Take EMOTION out of the transaction. Drain the reservoir of emotion while you’re making the decision to sell. Then the next step is to step back and approach the process rationally and make your decision-making objectively.
Get HELP. Protect yourself. Engage your lawyer to review offers, contracts and deals. Call on your accountant to prepare financials. And enlist the help of a professional who knows the industry, your business, and is experienced in selling small businesses.
You can hire a business broker, but that will cost you. Instead, we suggest you contact the Vice President of Franchise Development for Alliance Franchise Brands, MIKE CLINE.
Mike has been in the sign and graphics business for almost 15 years. During that time he’s helped entrepreneurs realize their dreams of owning their own businesses, and he’s successfully counseled owners how-to reach their personal and financial goals when selling their businesses.
With that in mind, we asked Mike to share what he’s learned beyond the basics that can help you sell when you’re ready.
Secrets to Selling Your Business
Have clean FINANCIALS. “If you want to sell your business for the maximum amount, the number one thing in all my years of doing this is to have clean financials,” says Mike. “Have your last three-to-five years of financials available and easily understood. And those financials should always match up to a tax return. Embellishing the numbers to make yourself look good on the surface is only healthy for your ego. It does not help you sell a business of value.”
Have the right STAFFING in place. “Buyers aren’t buying a job. They’re coming in with a vision to grow the business. It’s critical that you have well-trained people filling all the roles—even if you have to cross train for the size of your business—in order to get full value when you sell. If a buyer feels they have to work in the business, and not on the business, that’s going to lower the value.”
Take pride in the WORKPLACE. “If you put your house on the market, you make it look good. Business is the same way. Prospective owners are going to walk in and see what they’re buying. When they do, if the work environment is messy, disorganized and unhealthy, they’ll wonder how safe and productive can the staff be. And, what must prospective customers and existing clients think when they enter a cluttered and uncomfortable workplace? You want the new owner to be proud to stand behind the counter, to go into the production area, and to welcome loyal clients into the business.”
Have your TECHNOLOGY package up to date. “A prospective buyer is going to look at your equipment, computers and software. If there’s a gap between what you have and current technology packages, they’ll say, ‘I’m going to reduce my offer, so I can buy the equipment you should have purchased ahead of time.’ You don’t want that to be an issue with a buyer. So get current.”
Get HELP from the professionals at Image360. “OK, that shouldn’t come as a surprise and it’s not a secret. If you’re an independent and you want to stay independent, you’re going to sell to someone like you. When you hand over the keys, you most likely will provide two-to-six weeks of transition training. Then you’re gone. Even if you have a great staff, your buyer is going to be lost: ‘I can’t learn everything in a few weeks wisdom you acquired over many years running the business. Who do I go to when I have questions? Who can I rely on?’
“But, if you join Image360, we’ll work together to find prospective owners. And they won’t necessarily have to come from the world of signage. We’ll be looking for a broad range of candidates who have really good, well-rounded business acumen. Then we can train the ideal person on how we do what we do and assure them that they’ll have reliable support throughout the life of the agreement. We have more than 40 professionals at our Home-Office and subject-matter experts in every aspect of the business supporting franchisees every day. Additionally, your new owner will become a member of Alliance Franchise Brands and have a network of peers to meet with and to contact for solutions, to share best practices, and to bounce business-building ideas off of.
“I know your situation is unique and different. So give me a call. I want to learn about your business, see where you stand, and share a few more secrets. HELP is here.”
Vice President of Franchise Development
Alliance Franchise Brands