I want to sell my business at the maximum price! Yes, this is the statement you will hear from every business owner who wants to Sell a Business in India including yourself. And, it is obvious. We understand that you have started, nurtured, maintained and grown your business like your own child and therefore your emotions are attached to it. If anyone undervalues your business it hurts. We have observed that approximately 80% businesses are sold for less. The reason is simple, seller has not prepared well and due to lack of knowledge, their proposal lacks the required punch which needs to hit buyer’s mind instantly.
If you want to sell your business at the best price, first step is to put your feet in buyers shoes, and discover what would you like to view in the offer at the first glance. Your half work is done here. However you need to add certain pieces of your business in your offer to make it attractive for your prospective buyers. If you add all positive items of key business areas appropriately, then you are most likely to receive first offer and the best price of your business. The key lies in your proposal and business sale listing. It is fact that businesses are sold quickly and at the maximum price, when proposal is extremely attractive for prospective buyers.
We have listed down few items which you need to include while preparing your listing and proposal. Our tips will show you the way where information is not available to you on how to sell your business at the best price, like headlights of your car which shows you path in dark. And always remember, first impression is last impression and you have to make impeccable impression on your prospective buyers.
Brief company history – Write brief history about your business, when it started, situated, major mile stones, achievements. Your personal contribution to the business – This will show how much you were involved in your business. You can state convincing reason for sale too in effective manner.
Financial Performance – This is the most critical aspect of your business and every buyer would like to look at it first. You may say business was making profit for last three consecutive years or highlight the years of where profit was above average. If profit is low or in loss, provide proper justification.
Cash Flow – Highlight your cash flow as buyer will immediately get to know the liquidity status of your company and ability to pay any debts. This will strengthen your proposal in a great way and you can ask for the maximum price based on this.
Debt Free/Limited Liabilities – Another key financial aspect, which will help you to get premium price. Include details to convey that your business is debt free or has limited financial liabilities with a way to tackle it effectively.
Assets and Inventory condition – If you can focus on condition of your assets and inventory, it will immediately attract attention of buyer. If condition is good, buyers will not hesitate you to offer you expected price as he does not have to further invest much in these areas.
Future Growth Prospects – In your proposal you must include future growth prospects of your business. You can site examples from any recent publications or reports published by market research firms. You can include your upcoming product lines and its potential markets too.
Orders in Pipeline – Include orders in pipeline so that buyer will have confidence in your business.
Existing Customer Base – You can highlight characteristics of your existing customer base and your relationship with them. This will strengthen confidence of your buyer in terms of his relationship with customer base.
Strategic location – Your business’s strategic location is a master key – If your business is located in the area with good infrastructure as well as decent connectivity via road, bus, rail, air and/or sea. You can include availability of human resources, water, electricity etc. This will prompt your prospective buyer to pay you premium as buyer does not have to bother about these vital issues. You may include political stability and government policy which supports your business.
Market – Local/National/International – What is current and future market scenarios? What is your market share in local, national or international markets? You should include information about your product market. You should include brief about your sales and marketing efforts – past and current. This information attracts to all buyer and if you are able to establish positive thinking. If market is not favourable, you need to justify and also include future growth positives.
Exclusive Products/CopyRights/Patents/Licenses – You should add premium to your price if you have exclusive products. This will ensure that buyer does not have to compete hard. Also include all copy rights, patents and licenses you have obtained – this will remove hassle of your prospective buyers and will be ready to pay you better price over other businesses who does not have.
Buyer’s Objective – Include statements in your offer which matches buyers objective like quickly pay off your investment, fits your budget, ownership value, profit and growth, business Is independent of owner, strong management team, size and revenue, clean track record of legal and insurance related matters, reasonable expectations, Established operating systems and procedures etc.
If you focus on above areas and highlight vital information in your proposal or business listing, you will not only attract many buyers, but you will be able to sell your business at higher price than what you have expected. Once you receive offers to buy your business, you can provide more detailed information at a later stage in each area. You will need to follow best practices to sell your business which you can read in our another articles.