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Thursday, October 6, 2022

Have These 5 Factors in Place Before Selling Your Business

So you’ve decided to sell your business and now you need to market the opportunity to potential buyers. Naturally, you’ll want to make your business as appealing as possible. However, no matter how creative you get with describing your business, your words aren’t the only factor involved in attracting interested buyers.

There are several key details that have the power to make your business automatically more appealing to potential buyers. If your goal is to quickly sell your business to a qualified buyer, make sure you have the following 5 things in place.


  1. Trained employees

Having trained employees on staff is one of the most attractive factors to potential buyers. It doesn’t matter whether you’re selling a retail business, a restaurant, or a FedEx delivery route – trained staff will attract more buyers.

In the case of FedEx delivery routes, having experienced drivers will reassure potential buyers that the business will continue to run smoothly as they integrate and become familiar with how things are run.

It’s true that some new business owners will fire an entire staff and bring their own people on board, but only when they’re thoroughly familiar with the business. Many new business owners are new to their industry and will need to lean on an existing strong staff to help them understand what they’re doing.


  1. Current tax filings

When a new owner takes over, they’re responsible for filing back taxes for the business. If you’re not up-to-date with your business’ taxes, get your back taxes filed as soon as possible. Potential buyers won’t like the idea of dealing with back taxes for their new business, especially since it will be unfamiliar at first. 

If you’re behind on your tax payments, get caught up or have a plan in place with the IRS. You’ll have to deduct back tax debt from the price of your business to make it worth buying, however. And you may even need to lower the price to account for the new owner’s hassle of dealing with back taxes.


  1. Organized financials

Having well-organized financials is the best way to demonstrate transparency and show potential buyers where your business stands. Many buyers will steer clear of deals that have disorganized financials since messy books can indicate more than just disorganization. For example, disorganization is often used to disguise financial fraud.

Another reason organized financials are attractive is that potential buyers will want to see with their own eyes that your business has the potential for growth. Give them that opportunity to see for themselves by getting your books in order before placing your business up for sale.


  1. An organized storage area

 Having an organized storage area may not seem like a big deal, but it will make a massively positive impression on potential buyers. The larger your storage area, the more important it is to be organized.

Imagine being interested in buying a business and walking into a massive, disorganized storage area that you know you’ll have to fix when you take over the business. If you’re disorganized in other ways, this could be just one more thing to deter someone from buying your business.

If you have a physical location, whether it’s onsite storage or a self-storage facility, get it organized before you even put your business on the market. You’ll leave a more positive impression on potential buyers.


  1. Effective systems and standardized processes

Effective systems and standardized processes are essential in every business and can be quite an attractive factor for potential buyers who have never built your type of business from the ground up. Strong systems support success, and when paired with a trained team, systems can be a deal-breaker. 

A great example of this in action is the collection of systems you’ll find in a drive-thru coffee shop. The best drive-thru coffee shops have specific recipes that keep the cost of goods predictable. They also have specific ways of making drinks to ensure consistency. For example, they might add syrup and sauces to the cup first using visual marks on the cup to measure the right amount. This ensures drinks taste the same no matter who prepares the drink.   


The bottom line: organization sells a business faster

Potential buyers want a business that will be profitable, but they also don’t want to sort through someone else’s mess. If your goal is to attract serious buyers, focus on getting organized. The potential profitability of your business can only be truly seen once your organization is organized from top to bottom.

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