Building a business is like running a marathon, not a 40-yard dash. It requires hard work, a well-conditioned work ethic, a high pain threshold, and taking measured steps one mile at a time. But remember to save some kick for the final stretch to the ultimate goal.......the exit.

If you want top dollar for your business, you can't appear to be coasting listlessly to the finish line. So how can you kick your business into a higher gear during the last few months or years of ownership?

Visit Your Accountant.

Remember your silent partner.......Uncle Sam! Before negotiating any deal, it's important to understand the tax implications inherent in a business transfer transaction. Make sure all tax obligations and filings are current and your business accounting records are clean for potential buyer review. Accurate financial statements not only adds to a buyer's comfort level, it more likely will result in a higher sales price. A potential buyer is typically looking for a predictable cash flow from the business. Three, four or five years of professionally prepared financial statements and tax returns will show them that.

Understand Who Your Buyers Are

There are three types of buyers for your business: financial buyers, strategic buyers, and individuals. Financial buyers include private equity or "buy-out" funds that take a controlling interest in profitable businesses that have the potential for another good growth spurt. Strategic buyers can include any business that would benefit operationally from owning your business. Think of large customers, competitors or regional businesses that need to expand their manufacturing capabilities.

Consult With A Business Brokerage Firm

Prep your company for sale. In the same way that homeowners spruce up their homes before talking to Realtors, business owners benefit when they have the opportunity to unload unprofitable or slow-paying customers, cut unnecessary expenses, and build up areas of perceived business value. Explore opportunities to develop longer-term customer contracts and level out erratic revenues. Do everything you can to build consistency into your company's financial and operating performance.

Select Your Support Team

Take good care interviewing professional advisors that will represent your company during sale negotiations. Also, if you decide to hire an investment banker or business broker to solicit potential buyers, make sure the intermediary has the prestige and expertise to represent your company well. The key to a good intermediary is proper deal-positioning and the ability to get return phone calls and help your company cross the finish line on a high.

For entrepreneurs in any industry, selling a company they have built from scratch is rarely easy. But the heart wrench can be lessened if the small-business owner takes an active role While most deals take several months to close, small-business owners should start preparing their businesses for sale several years in advance by fine-tuning operations, auditing finances and cleaning up facilities. Still, no matter how tidy the facilities or the books, deals often come down to mutual understanding.

Moving on – How to Make your Business a Worthwhile Purchase

If you are a business owner worth your salt (or silicon), you’ll be planning big things for your small business in the future. Either you’re going to want to grow your business to the tune that someone from Google/IBM/Comet want to offer you a cool few mil to acquire you, or else you want to make sure your precious life work yields more cash than just to keep you in a good line in designer tees and holidays in far flung places.
In other words, you need to think big, and you need to think ahead. What is it about your business that makes it valuable? Where is the income from your business coming from for the next few years, and what is its potential? Your business, once you’ve been operating, should be more than just YOU – after all, once you have a brand, a loyal following and some measurable income, you become a business not just an individual with a winning way with a screwdriver.
What is it about your business that makes it valuable?Your brand, your built up customers and your goodwill, although dificcult to measure, are one of the key selling points for any business, as this shows its potential. A restaurant that takes thousands of dollars/pounds a month, and then poisons all of its diners in one sitting, is no longer a viable business. It’s the same thing with any small business.
Brand: Make sure that customers, suppliers and contacts know your brand – your logo, your company motto or slogan and the way you conduct yourself and your business transaction are all key in making sure that your brand is associated with you, which will add value to your business. My own brand is ‘We can help you love learning’ and it has to come through in my writing, in the conduct I have with my contacts (consequently I volunteer for learning events, am stocked in the library, offer lots of stuff for free, and am currently back teaching!) And I mean it – it’s not a hollow statement, it’s a fact of my business conduct.
Regular activities: What do you need to do, and when, for your business to keep going in the way that it is, but in an upward direction. Are there regular tasks you have to do, on a particular day/month/time of the year, that make your business function well? If so, this is part of your business activity ‘model’ and should be recorded in an operating manual. Operating manuals, although you may feel in the beginning a large and unwieldy activity, can support your business case for selling, and give weight to claims that you know what you are doing. As well as that, if anything was to happen which meant that you can’t operate your business yourself, another could step into your place, and run the business for you for a while. That couldn’t happen if there were no ‘instructions’ on how to run the business, which, essentially, is what a business operating manual is.
Regular customers: Especially if any have contracted you on any sort of retainer or monthly subscription basis. However, a regular customer file, along with their average annual spend, can show how much your business is worth in potential sales.
Well kept accounts: If you keep your books on a monthly basis, and finalise at the end of the financial year, you can’t go far wrong. Accounts should detail your outgoings, capital purchases, other expenses, income, profit, loss, depreciation of any equipment etc. These accounts make up what you’re really worth, at a given point in time, on paper. Any stock or cash you have will be shown here.
Detailed business plans – to show that you have a direction, and if possible, show where you have built the business from.
Other areas to consider
Look after your stock and equipment – after all, if you don’t it will lose value.
Look after any property you have – if you sell a business as a going concern, appearances are everything. A smoky shop or workshop does not give a good impression, nor does a pile of spare parts littered on every surface.
Maintain a good reputation and a good credit score –pay your bills on time, deliver what you say you are going to, and conduct your business with professionalism,
Find out as much as you can from others who have done the same – what made Google want to buy YouTube?? Potential – and that’s where you can compete with the bigger businesses!