For the majority of business owners, the curiosity, energy and positive outlook that helped them start their business dissipates so significantly over time that the business becomes a daily bicycle ride up a steep hill; Not the new caravan-towing 4WD envisaged. And when the decision to sell is made – it’s because the fuel-tank is empty.

Businesses do not go “from strength to strength” unless the owner holds fast to the desire and mindset that first existed.

Perhaps you can see these three characteristics in your business.

1. Most of the work you do doesn’t matter. Because the majority of your daily activity cannot be directly linked to either client acquisition or client satisfaction.
2. Development and revisions of systems and processes were replaced many years ago by the monotony and stress of simply existing.
3. You have not recently asked, “Where did that client come from?”

The process of due diligence is invasive and thorough. It can at times be confronting and often offensive to us as business owners. Don’t kid yourself, a fresh coat of paint and washed curtains might hide the cobwebs when you sell a house – but a business? Forget it. 

And the number one reason businesses don’t sell can be distilled to a single concept – Risk and Return are not in balance in the eyes of the prospect purchaser. If they were in balance – you would probably not be seeking to sell, and the prospect would be more anxious about buying.

The statement may be insensitive and brutal; and putting aside those outlying reasons – that perhaps you have only been speaking with dreamers, or that the marketing is insufficiently targeted, etc. real buyers don’t have time to educate you, to wait, or hold any desire to hurt your feelings.    

Therefore, when you ask yourself; “What should I do to make my business saleable? – here are the top five factors to work on, collectively they will help you be successful in selling your business.

1. Make your personal daily input redundant. (for clarity unless you are a one-person operation do not personally be at the centre of every activity and every decision that occurs in the day-to-day-operations) – ensue anybody could do it .  
2. Create the recipe-book for success… this may also be known to you as the operations manual or duty statements or the business plan. Simplify and formularise so that (as per point 1) anybody could do it.
3. Ask more questions of the market. Why did you buy? How did you hear about us? What problem does this fix?
4. Aim for ever-bigger profits… that means you have the freedom to work on any one of the following activities (collectively or individually) … sell more stuff, sell your stuff for higher prices, drive down costs (either your fixed costs or your costs of production)
5. Return to measuring and managing what matters.

I am not trying to be glib or mean but the simple truth is good businesses do sell. Even if you are not yet looking at an exit strategy, if any of these five points resonate with you, that will be the starting point. In the next few blogs, I will expand on these points and help you minimise apparent business risk… and remind you how you can regain the things that you have let fall by the wayside. 

Returning to the basics will remind you that you can’t lessen the risk by reducing the effort.

Do you want to know more? Kevin Lovewell is an Accountant and Registered Business Valuer – He works as a business intermediary acting as various seller or buyer agents and as the principal agent in complex M&A projects; he is an active business valuer in the Small to Medium (SME) Market regularly undertaking work in appraising SME businesses for their market value.

Kevin Lovewell
M: 0401 308 385
P: 1300 551 757
E: Click here to contact Kevin Lovewell
Member & Registered Business Valuer
Australian Institute of Business Brokers

Jessica Holbrook
P: 1300 551 757
E: Click here to contact Negotia Group
Business Analyst