7 foolproof ways to ready your business for the market
According to The Federation of Small Businesses (FSB), there were a record 5.5 million private sector businesses at the start of 2016.
This is an increase of 97,000 since 2015 and 2 million more than there were in 2000. High growth businesses are the backbone to economic prosperity. But how exactly do you prepare yourself for that all-important sale?
Taking a considered approach to selling the business at least a year or two years in advance of the time you expect to sell it will help you get your business in better shape to attract the best buyer and the best price.
1. Define your business proposition and brand
“This is where your marketing strategy is key – do you have a clear and concise brand message and target audience? Is there sufficient market awareness around your product or service?
“Do you have a clearly articulated (and functional) website? This will be the first port of call for potential buyers.”
2. Create a social media footprint
“Whether you are a business-to-consumer (B2C) or business-to-business (B2B) operation, social media such as LinkedIn, Twitter, Instagram and Facebook is unavoidable. The specific channels you use will be dependent on who your customers are and what you are delivering.
“A strong content marketing strategy will help you build awareness and demand – thus impacting on market perception and price.”
3. Get market influencers on side:
“For B2C businesses this may be customer reviews, bloggers and social media followers. For B2B businesses this is likely to include trade media, case studies and industry analysts. Industry feedback will also help you get an independent view of your strengths and weaknesses.
“Budget for public relations activity. Many companies would rather devote their entire marketing budget to advertising rather than consider PR. For marketers, advertising is easier to justify as they can capture quantifiable metrics, like click-through-rates and page views. With public relations, results may appear less tangible, but get the formula right and PR can deliver results that outstrips the advertising spend by as much as three or four times.”
4. Get finances in order
“Regular and reliable management accounts are vital. Look at what cost efficiencies you can make and start tidying up items such as any special expenses arrangements with shareholders. Seek tax advice. Will you qualify for entrepreneurs’ relief? Do you want to incentivise employees with tax efficient EMI share options? Tighten up any hand-shake arrangements – if some shareholders are due to get more on a sale it is time to regularise shareholdings now.”
5. Review your customer base
“Think about diversifying your customer base. Check your business terms with customers. Is there any change of control provisions that could be problematic to a buyer?”
6. Review your Intellectual Property
"Do you own everything that you need to? What licences do you need to put in place?"
7. Develop your team and check compliance matters
"Start thinking about your management team – will this business run without you? Having a succession plan is key for business continuity. Is the buyer going to need you to stay on to make it run and if so how long will that transition period be? Also, are immigration, tax and pension requirements all up-to-date?
"If after all this preparation, the decision to sell the business still stands, the owner will now be in a much better position to make a sale. The business now represents an attractive acquisition with a solid reputation and good prospects for the future."