Preparing to sell your business
If you’re planning to sell your company, you should begin the preparations well in advance. The most important thing is to ensure that your business is profitable and that your financial statements also reflect this. You can lighten your balance sheet by selling assets that are not essential to your core business, such as investments and large real estate holdings, to make the transaction price more affordable for the buyer. The profitability of your business is measured by EBITDA (earnings before interest, taxes, depreciation and amortisation). It’s mainly driven by, sales and turnover, but you should also be mindful of your costs and avoid unnecessary expenditure.
In addition to the financial aspects, it’s important that you have clear and well-documented processes on the operational side of your business. You should also document all agreements, customer relations and products and ensure that your financial administration is running smoothly. When everything is in order, a buyer will be able to evaluate your business more easily and your operations will be less dependent on the tacit knowledge in the organisation. Entrepreneurial businesses are, by definition, reliant upon their owners so you need to make sure your business is ready for the change in ownership and management. A buyer will often want to ensure that the target company is capable of operating in your absence. Selling your business will also be a big change for you personally and you need to be prepared to give up control of your company.