When you eventually sell your business one day (and I hope that most of my readers, if not all, have that goal in mind) you will be competing in an entirely different market. So just as you currently argue with, and persuade your customers that your offering is better than an alternative; you will have to convince prospective buyers of your business that your business is a better deal than the others in a similar price range.
South Africa is a very thinly traded market for small or medium size businesses, so prospective buyers are unable to go shopping for valve manufacturers (say) and expect to make a choice between five or six similar businesses.
Realistically, buyers look in ranges of price or profits, within broad industries, unless they are extraordinarily patient. At the top end, they are patient for the right opportunity, while at the bottom end they are desperate for something to make a living with, and will settle for anything of a very wide range.
The point remains though, that your business is competing with all other businesses within a range, almost regardless of what your product or service is. So PrepareYourBusinessForSale™ makes businesses attractive for sale, as part of its offering. But quite apart from that…
It strikes me that the first place to start is with the financial statements; not so much the numbers expressed, but simply the format. This is something which can be fixed for little or no expense by following some simple rules:
- Sending someone just page 6 of the financial statements is about as useful as an anus on the end of your elbow. The income statement is only a very simple part of the entire document. Any serious buyer is going to look at the balance sheet, the cash flow statement, the notes, and all the rest. He is doing so because that is what he is getting from all the other businesses out there vying for his investment ZAR.
- Almost all reputable accountants now send financial statements in pdf format to their clients. Get yours in this format as well. It makes for easy and standard transfer of information. If you have to scan a paper version, then set up your scanner to scan into a single pdf document. There are few things less helpful than 15 individual tiff files, one for each page. Actually a correction here: There is something less helpful – 15 individual tiff pages scanned upside down!
- As for jpg files: See above.
- Just do it in pdf, please.
When a prospective purchaser is looking at five different options, four of them with complete pdf financials, and yours in 15 individual jpg files, you might as well be trying to convince him that a haemorrhoid would look good on his earlobe. Just so we are clear here… A haemorrhoid does not look good on most people’s earlobes. I’ve heard.
You will be up against many other business sellers when you sell yours. They have created a standard. You can do something better, or you can match them. But don’t lower the bar.
Your eventual buyer is probably not an accountant, nor a computer graphic artist. Nor “something in between”. Just do it right to start with. The standard is very tight. Like a duck’s bottom. You don’t want your offering to take on water and sink below the others, do you?