If you are thinking about selling your business in the short term, there are some areas you can improve now that will increase the value of your company to potential buyers. Here are four of the most common things a business owner can do right away.

1) Increase your reported profit and cash flow.

A buyer will probably need a loan for the purchase of your business and will need your current earnings to justify the loan. Also, the price a buyer will pay is usually directly tied to the profitability of your company.

Account for Profitability:

You will need to account for profitability that is paid in the form of benefits to you. This is not a problem.

Increase Your Cash Flow:

However, you can probably increase your cash flow by tightening control of your expenses and increasing advertising or promotions.

Identify Short Term Efficiencies:

Consider hiring a CPA or other business professional to scour your books and operations for short term efficiencies.

2) Put your business on auto pilot.

Buyers want to purchase an income with the confidence that they can continue, or improve, the income stream of the previous owner. They place higher value on businesses that can run themselves. Increase the value of your business by making sure that your key employees can run the day-to-day business.

3) Put your house in order.

Potential Buyers don’t want to buy a mess. If your company has disputes, overdue receivables, an uncertain lease, poor accounting records, employee turnover, out-of-date stock…., clean it up. Buyers will pay more attention to your company and make better offers if they have confidence in the company they see.

4) Seek assistance in preparing your business for a profitable sale.

Our Sunbelt office in Charlotte is the oldest Sunbelt franchise in the United States and one of the largest in the southeast. We have between 50 and 100 businesses for sale at any time. We would be pleased to assist you in selling your company. .

3) Action Items

  1. List one way you can increase profitability.
  2. List two ways you can increase cash flow.
  3. What are three short term efficiencies?
  4. How can you automate your business so it runs without you?
  5. Begin tracking line items from this document.

Peter Coleman, CBI, CExP

About Peter Coleman, CBI, CExP

After nearly twenty years in business brokerage, including four years of ownership of his own Sunbelt offices in South Mississippi, Peter has built up a specialization in health care related businesses, the hospitality industry and franchise resale. Peter completed all the required courses and was awarded the IBBA qualification of Certified Business Intermediary in 2001. He is an accomplished public speaker and often speaks to business groups about the subject of “Maximizing the Value of your Business” and “Preparing your Business for Sale”. In his spare time he has been very involved in coaching Track and Field in local schools, universities and also to Olympic and World Championship level. He is a licensed real estate broker in North Carolina and Louisiana as well as a member of IBBA, M&A Source. Visit Sunbelt Business Advisors

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