Not that that?s easy to do, of course. But, emotions-aside, it?s often necessary if you want to continue basking in entrepreneurial success. So how can you tell when that ?parting of the ways? moment has finally arrived? Well, if your goal has always been to sell your business at the peak of its earning potential and performance then, if you recognise one or two of the following scenarios, you may just want to start doing some metaphorical packing right now:
1. Client listIf this is diverse and it?s growing at a rate of knots ? and it?s not a sudden increase due to a particular promotion, but a steady climb over months, or even years – then it?s definitely time to say ?arrivederci? and head for even sunnier climes.
2. Additional revenue streamsProviding new outlets for growth, such as branching into a new sector or signing into a lucrative partnership (ie a popular restaurant developing a range of branded convenience meals for supermarkets), always has the potential to maximise the value of a business, making it particularly attractive to potential buyers.
3. Team spiritHow skilled and enthusiastic are your team? If they?re right behind the business and have the ability and determination to take it forward without you, then that?s a very valuable asset that any potential buyer is going to love (if the opposite is true just watch your company sales value slump).
4. ProductNowhere is timing more crucial than here. For instance, it would be crazy to try and sell your business just as a competitor is about to bring a similar product to market. However, if you have a complimentary product sitting right there that you?re about to launch, then that?s an excellent indicator of potential, new long-term growth and adds a very favourable aspect to the sale.
5. ScalabilityIf the cost of each pound in revenue is reducing in line with company growth to the extent it?s approaching zero, then feel very confident about putting your company on the market (this happens when you undertake a job once and receive payment for it over and over again). Another plus in terms of scalability is if you have a team of staff who have equal weight in ensuring the business is a success ? rather than relying on just one or two individuals. The latter would make a potential buyer extremely nervous.
6. Market positioning and brandIt?s essential to know exactly where your company sits in its market sector. Is it a contender for the top of its particular grouping, for instance? Does it have brand loyalty? If the answer to either of these questions is ?yes? then you should already have one foot out the door as obviously this will have a major effect on how attractive your company appears to potential buyers. Essentially, if you want to sell your business and get the best ROI then you have to demonstrate future growth and potential. No buyer is interested in past performance; regardless of how stunning it may have been. Business success is always about future rewards ? no-one?s going to be able to pay employees salaries based on past glories.
As you can see from the above, there are lots of reasons why ?now? could be the right time to sell on your business. Like most aspects of business though, this too requires a strategy which takes a number of different factors into account. That?s because the idea is to strike when the iron isn?t just hot, but positively sizzling. If you?ve done your homework properly you will know yourself when the best time to advertise your business for sale is. The next step is to convince the potential buyer that this is their golden opportunity for growth ? both for the business and their own personal fortune. Raj Dhonota is a serial entrepreneur and investor in start-up businesses. His business ventures span ecommerce, property, language translation, network marketing, recruitment, fashion and consumer goods. Image source
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