Even if you are not planning on selling your construction company now, or in a near future, you never know when a good opportunity to cash out on your life’s work can arise.
By preparing your business properly for a sell, you are not only attempting to display an attractive buy, but it may also help you manage your business in a healthy way. Having a well thought out exit strategy could give you a goal to reach at the end of your career and ensure that you live a prosperous retirement. Without a doubt, to prepare a company properly for a sell you must seek the help of a professional, but here are a few tips that you can apply yourself to help the process and be ready to seize an opportunity.
If you own any type of business, maintaining an organized and rigorous bookkeeping regiment is essential. Too many companies have gone under due to bad financial management. To manage a profitable business, which in the long run is more attractive to buyers, get good bookkeeping habits early on: categorize your expenses, maintain a payment record, and keep the records up to date. Buyers will want to review your financial statements so make sure they are clean and in order.
Establish and Use your KPIs
You must establish and use regularly your Key Performance Indicators when managing a profitable business. Using your KPIs will allow you to have reference points and a general feeling on how the business, or even a single project is doing. One of the best ways to use them is to select only a handful that best apply to your situation and use them regularly. It will not help you to have 25 different KPIs if they are not used properly, a handful of well-selected and well-used indicators will give you a better idea of how your business is doing.
Moreover, when it comes to selling your business, it will be useful to have those indicators to establish the value. Finding trends and patterns will help the potential buyers make a more informed decision, they will know what they are buying, therefor giving you a better chance to sell at the price you want.
Create a Buyable Business
A tremendously important, but too often forgotten point is that you need to create a business that is worth buying in the first place. Factors like bookkeeping and management are important, but you also need a robust and efficient workforce and internal process, a profitable business, etc. basically, a business that can grow. Sometimes, finding a niche market to specialize in can be the best way to make your business more attractive to buyers. The buyer will not only buy your profit, but your expertise and its place within the market.
Good Client Relationships
Whenever a company makes an offer to buy another business, one of the first things they look at is the client list. Markers such as the age of the clients, their value, their stability, their ability to pay on time, the length of the relationship with your company, etc. Having a safe and good clientele will make the difference for your business on a day to day, but it is even more important for a buyer, who is also buying your clients.
Seek Professional Help
Finally, but most importantly, seek the advice of professionals. You can consult broker firms specialized in these types of situations and that can help you get the best deal possible. It is extremely difficult to do this by yourself. Brokers will help you get your papers in order, help establish the value of the company, seek out potential buyers, give you professional advice on how to strengthen your business, etc. Seek professional help.
As mentioned at the beginning of the article, I attempted to give you a few simple tricks on how to prepare your company to be bought at its rightful price, but these tips should also be applied on a daily basis to manage a healthy business. Keep your affairs in order, you never know when the opportunity might strike.