You have opened your business, built it to the potential it is today, and now you are looking to sell it. You may be wondering when exactly is the right time to sell your business.
Depending on your current financial situation, it might be time to sell your business when your sales are consistent, all financial projections are positive, and you have a strong team with little turnover. The new owner of your business wants a thriving asset that can last for years to come so that it does not fail just within a few years of purchasing the business from you.
Sales Are Consistent
You need consistent sales in your business. Sure, there will be times that sales could be slow for various reasons, but you want to find a way to keep the consistency so you can rebound even from slow times.
Reassure your sales are consistent by:
- Regularly marketing to loyal clients via email and direct mail campaigns.
- Offering coupons to use on a monthly basis.
- Creating a loyalty program to encourage more client spending.
- Different promotions on products and services each month; give clients a variety of ways to save money when buying from you.
All Financial Projections Are Positive
The financial projections for your business must be positive. Any sign of negative turns can turn into fewer buyers being interested in investing in your business.
Keep updated income states, financial sales projections, balance sheets, and other financial documents so that potential business buyers know how your business is performing.
If you see your sales taking a downward turn, assess the situation. Do you need to train your employees to deliver more well-rounded customer service? Are your products and services meeting the needs of your clients or not? Analyze each bit you can about your business to make the necessary changes and reignite positive financial projections.
A Strong Team
The average turnover rate for all companies in 2020 was about 57.3% mainly because of the pandemic. About 3% of workers can quit their job in any month of the year. The largest turnover rate of 33% is mainly for first-year employees mainly due to no benefits and/or no work-life balance encouraged from working that job.
Selling a business can take at least two to four years to finalize. Build your team strong so that they are there even when the business changes owners.
Treat your employees with respect and give them the tools to succeed. Train them thoroughly so they can complete their job role with ease. Don’t give them basics and then throw them in the field expecting them to figure out the rest.
A great way to retain your employees is to have a monthly one-on-one meeting with each of them. Tell him or her what they are performing best and any critiques for improvement. Give them an annual raise to be proud of, but do not overdo it to the point that you will not be able to keep up a business profit.
Give them good insurance benefits and perhaps a product or service discount depending on what your business sells. Take it a step further and host employee appreciation events at least once a quarter to maintain employee loyalty.
Conclusion
Selling a business is tenuous, but doing it at the right time will make it easier. If the process is overwhelming and you don’t know where to start, business brokerage experts like at A. Neumann & Associates are specialists in the entire process and can aid in the process. Whichever route you choose, due diligence is paramount and make sure to dot your i’s and cross your t’s!
