Is your business sellable?
Business owners who have a clear goal of selling their business in the future are doing way better than others and there are a few good reasons for this ‘phenomenon’. Even if you have different business goals such as to build a family business for the future generations or simply to become wealthy you should still consider if your business is sellable in todays’ market.
Firstly, businesses that are being built to be sold use specialist services more than other businesses, such as accountants, financial planners and business advisors and therefore are reducing the possibility of making mistakes and failing.
Would you ever consider buying business without proper business records or a non-compliant business with e.g. two or more years of tax returns not being lodged? Off course not! This is why a sellable businesses have sound bookkeeping records and are compliant with tax and other governing laws. This is why you should have a spotless bookkeeping records and state of art accounting program such as XERO or MYOB. Some bookkeeping advice should also be obtained from your bookkeeper or accountant. I find that small business owners who are engaged in their bookkeeping are more switched on with their business and can make better business decisions.
Can your business operate if you are not present for 30 days or more? Does your business have description of workflow, office policies, and procedures of ‘how we do it here’ including charts and instructions? If not you should start working on it right now as this will add value. I know that you may think that this exercise may be a waste of time but 'magic happens once your ideas are on paper' and you will be able to see potential problems or possibilities to improve and maybe even innovate.
Some of the most important questions for any business are profitability, stable cash flow and ability of the business to keep existing clients and attract new ones in the future. In order to prove that your business can do this you need comparative financial reporting for least last three years and a projected budget for the following 12 months. Ask your accountant for help with your cash budged as this report includes all of your cash outgoings which are not on your Profit and Loss report such as loan repayments and dividends payouts.
Branding, website, social media use and the business name can add value to your business only if all of the above are in good order.
For more information please call me for free 1hr session.