Optimising Saleability

Ensuring the Best Value

One of the questions we are most frequently asked is "How can I ensure the best value for my business?" Here are some very useful tips:

1. Planning Ahead - the exit strategy
While it isnt always possible, the best time to plan for the sale of your business is two years ahead of the time you wish to exit.  You also need to:

• Understand the complete process involved
• Be committed to the sale
• Know the proportion of equity you want to sell (usually we strongly recommend 100%)
• Be prepared for the required level of hand over assistance
• Consider the availability of vendor finance

2. Optimising Profits
An owner should optimise profits during the time available prior to the sale. Profit is still one of the most important determinants of price. This may mean owners need to:

• Eliminate all private expenditure from the companys financial records
• Optimise the staff level and structure
• Exercise budgetary control of costs
• Maintain or, if possible, improve sales and gross profit.

3. Dont Wait Too Long
Dont wait until the business has exhausted every opportunity. Too often, vendors leave the sale until too late. The best prices are obtained when the business can still offer upside potential to the new owner.

4. Implement Effective Systems
Minimise reliance on the owner/operator by implementing effective quality and management systems, as well as employing reliable staff.  Change your sales literature to focus on the business rather than the owner.

5. Clean Up
Clean up the premises and the plant. Remember, first impressions are lasting ones.

6. Eliminate
Bring in realistic stock and WIP valuations, & eliminate obsolete or slow-moving stock.

7. Safeguard The Lease and Other Contracts
Provide the opportunity to extend the lease.  Tidy up employment contracts, supply agreements and the property lease.

8. Use The Professionals
Use a professional to prepare presentation material, maximise exposure and negotiate price with the knowledge of the market. Credibility in presentation and negotiation is vital.

9. Make It A Team Effort
It is essential that the sales process is viewed as a team effort, with the broker working alongside the vendor and his/her professional advisor. This pooling of resources means that each party can contribute their unique knowledge and information to the selling equation.

10. Call Us - Telephone 64 9 309 8727