Looking to sell your business? Here's why you need your business systems & procedures documented
It’s a sad situation when a business owner goes to sell their business and finds out after putting in many years of hard work, that their business is not worth anywhere near what they hoped.
The problem is that they ARE the business and without them there is no real business to sell.
In cases like this it becomes more difficult to get a sale price which is beyond the value of their stock and maybe a small, nominal amount for “good will”.
In a recent article published by Xero, their research indicated that those businesses with well-documented systems and processes are easier to sell and can sell for a premium price compared to those that have no written systems.
There are numerous benefits to implementing systems in your business. Here are some of the most important:
It builds a valuable asset. It’s nice if your business gives you a great cashflow to fund your lifestyle. But wouldn’t it be fabulous if one day when you decided it was time, you could sell your business and have the biggest pay day of your life?
You can only do this if you build the value of the business and that can only happen if it is a system that can continue running without you.
Leverage and scalability. Systems give your business the ability to expand. You can replicate your business in other geographic areas yourself or by franchising or licensing the rights to your business system. This provides a great opportunity for an incoming purchaser.
Consistency. Consistency is one of the keys to delivering an excellent customer experience. You may not like the food at McDonalds but one thing you can say about them is that wherever you go they deliver a very consistent experience.
Lower labour costs. When you and your staff don’t have to waste time and effort re-inventing the wheel each time, this improves your efficiency and reduces your labour and retraining costs.
More attractive to potential purchasers. A well documented business can add real real value for an incoming purchaser. This allows a new owner to step in and start running the business from day one and not have to spend valuable time attempting to extract knowledge from the previous owners head.
Shorter handover. Once a systemised business is sold, the former business owner (you) can step out of the business sooner.
Sometimes when you’re selling a business, the new owner wants the seller to remain on the scene for many months to ensure a smooth handover. Having everything documented minimises that time.
Are you looking to sell your nest-egg but are concerned that you don't have well-documented systems and processes?
Talk to us at The Business Exit Company Ltd. We can show you how we can make your business more valuable and attractive to potential purchasers by building a cloud-based Business Systems Manual which will detail your primary business procedures and policies and which can be easily transferred to a new owner.
Just find a time-slot that suits you and lets have a chat to establish how we can help with maximising your business sale potential. We will also tell you the three important things you need to focus on right now to start to get your business sale-ready.
Don’t wait any longer, this is a free no-obligation 15 minute phone call with someone from our Auckland-based team where we can see if the fit between us is right and help you to get started on the road to a successful business sale.
Schedule your own appointment right here. https://meetme.so/DeanRuscoe
Just pick a time that suits you and we will call you at your chosen time…its that easy. Talk soon.
To your business sale success.