There are plenty of times in life when you have to change your perspective and put yourself in someone else’s shoes. If you’ve ever sold your house, you quickly learned that prospective buyers don’t look at the property the way you do. You probably overlook a few places of chipped paint, squeaky door hinges, and the carpet stain that’s been there for years. To you, those are minor details. To prospective buyers, all those things stand out and add up, lowering the amount they will be willing to pay.
When you begin to think about selling your business, you also have to change your perspective. You have to view your business the way a buyer views your business and determine what the perfect buyer would want to see in your business. As with real estate, the things you may overlook in your business will stick out and add up to a buyer.
Look at your client list, financials, employee skill sets, physical property and assets. Are they really worth what you think they are? More importantly, can you make improvements (equivalent to painting, oiling hinges, and replacing carpet), that would boost the value of your company? It’s critical to make that assessment and follow through with making improvements before you even consider taking your business to market.
Hopefully, the improvements you need to make are relatively minor. However, if they are not, it is still worth your effort and resources to boost the value of your business. In a house sale, new paint and carpet will boost the sale price to the value of the new paint and carpet. However, in selling your business, making the necessary improvements can boost the value and your net proceeds at closing exponentially! Improving the value of your business can add hundreds of thousands or even millions, and it will make a huge difference in your realized net proceeds.
In the same way that a real estate agent can see your house the way a buyer will see your house and can point out the improvements that need to be made, an expert exit advisor can do the same for your business. An exit advisor can objectively assess all areas of your business and help you develop a plan to make improvements. You’ll quickly see that you’ll get a very positive return on your investment.
