Preparing a business to be sold makes the business more attractive to potential buyers before you actively start the sales process. The goal of sales readiness is to maximize the value of the business and make the sales process run smoothly. Through proper preparation, you realize better results, like you are training for a marathon.

Are you thinking about selling your business in the near future? Then read on about the 10 preparations you can make. Some preparations take more time than others. Therefore, start preparing your business for sale on time.

We conclude with a final preparation; the dependence of the company on the owner. Since this is an important point, we pay extra attention to it.

Ready to sell in 10 steps?

We name below a list of 10 things you can start doing today to get your business ready to sell.

1. Financial preparation: Potential buyers will want to take a thorough look at the financial health of your business. Is your administrative process not yet optimal? Then make sure your records are in order and always current. The numbers themselves will be an important basis for sales calls, but during the sales process, the numbers must also remain current. In addition, a good understanding of your current finances provides starting points for working toward optimal financial health. Is it possible to achieve cost savings and increase sales in advance? If so, this will have a positive effect on the value of your company.
2. Getting documentation in order: During a sales process, all documentation will need to be in order. So gather all relevant documentation related to your business, such as financial statements, tax returns, contracts and ownership documents. If any pieces are missing, you have time now to get the documentation in order. This will help streamline the sales process.
3. Optimize business processes: Identify and improve any weaknesses in your business processes. Potential buyers are more interested in a well-organized company with efficient operational procedures. Therefore, optimize your business processes for efficiency and effectiveness and document all key processes and procedures.
4. Check legal issues: Perform a legal check to make sure there are no hidden legal issues that could complicate the sale. Consider, for example, correct employment contracts, good terms and conditions and clear customer contracts. Legal risks can bog down deals. Therefore, check that all customer contracts and employee contracts are in place. Identify specifics and, for example, expiration dates. Also look closely at, for example, the duration of any leases so that it is clear what flexibility the accommodation has.
5. Human resources in order: The core of almost every business is the staff. Make sure you have a good team and that all personnel matters are in order. This includes staff appointments, payroll, and any ongoing disputes or issues. Buyers will be interested in the level of commitment, will staff members stay after any acquisition? Therefore, resolve any staffing issues, ensure development potential, a healthy company culture, and minimize staff turnover.
6. Understanding market developments: A buyer not only looks at performance in recent years, but must above all be confident of a healthy continuation of the business. Therefore, map the market clearly, determine your market position and identify relevant potential trends that can affect the value of your company. Focus product and market development on new opportunities that a buyer can capitalize on.
7. Optimize the valuation: Having a comprehensive professional valuation performed not only gives you a realistic picture of the current value of your business. A good business valuation also reveals ways in which the valuation can be improved. When you take sufficient time to prepare your business for sale, a valuation can highlight areas of concern to work on.
8. Commercial optimization: Companies with strong customer relationships, sales growth and stable supplier relationships offer more continuity and less risk. A well thought out and proven sales strategy, a proven marketing approach and stable lead generation creates a better negotiating position.
9. Tax planning: Work with a tax advisor to understand and optimize the tax implications of the sale. Identify and minimize potential tax risks.
10. Intellectual property: Intellectual property of, for example, a production method, recipe or software can be a key pillar in the value of a business. Secure and document intellectual property, such as patents, trademarks and copyrights. And ensure transferability of important assets.

You can think of the above points of interest as a roadmap for getting your business ready to sell. Below we pay specific attention to the company’s dependence on you as a business owner.

Step 11: Reduce dependence on the owner

Owner dependency is an important factor to consider when selling your business. Especially if you yourself as the owner want to get out of the business, the new owner will be looking for safeguards for the continuity of the business after the sale.

Therefore, consider the following options to reduce this dependency in a timely manner:

• Diversify knowledge and expertise: Make sure the business is not too dependent on the specific knowledge and skills of you as the owner. It may be profitable to invest in training the management team or attracting new talent to reduce dependence on the owner.
• Documentation of processes and procedures: Document all key processes, procedures and operational tasks within the company. This way, a new owner can more easily integrate and run the company without being too dependent on the outgoing owner.
• Customer relationships and networking: As an owner, do you maintain strong personal relationships with customers or key business networks? If so, it is important to work on transferring these relationships to the management team or to other new key people within the company.
• Strengthen the management team: Invest in strengthening the management team and have clear succession plans for crucial positions within the company. So that leadership is not completely vested in the DGA. This will give potential buyers confidence that the company is not completely dependent on the departing owner.

In practice, the owner often plays an important role after the transaction. Therefore, a transition period is usually agreed upon. During this transition period, the owner remains on the board for the time being, or remains available for consultation and guidance for the new owner. This can help ensure a smooth transition and address any questions or concerns the buyer may have. Often a transition period is accompanied by an earn-out arrangement.

By taking these measures, you can reduce dependence on the owner and make the business more attractive to potential buyers looking for stability and continuity after the sale.