Tips from Harvest Business Advisors on How To Sell Your New Jersey Business (video

Tips from Harvest Business Advisors on How To Sell Your New Jersey Business (video

In this brief video, the Harvest Business Advisors give their best tips on preparing your New Jersey business for sale.

Most Important Thing

Richard Stopa emphasizes the need for all information to be shared with brokers – hold nothing back (even if the details may be embarrassing or damaging).

Greg Caruso underlines the importance of staying profitable, focusing on the bottom line even as you are reaching the “finish” line.

And finally, Eddie Davis talks about the “warts” in a business – typically a balance sheet issue or a Human Resources issue that has not been adequately deal with. Eddie suggests once you are aware of these issues,  you address them head on.

Every business is new unique – but the team at Harvest Business Advisors is ready to work with you to make a business sales ready, quickly.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

How to Sell Your Business, Part One – Preparing To Sell Your Business

The length of the business sale process is different for every business and depends greatly on the current condition of the business and on general market conditions. It may take up to a year to prep the business for sale and then another six to twelve months to find a buyer and close the deal.

So naturally, the first step in selling your business is to ensure that it is in the best possible shape.  It should be financially viable, on a track to grow, and with solid operational practices in place that will ensure a smooth transition to a new owner.

If you are unsure and if you don’t know the value of your business, you may want to consider having Harvest Business Advisors assist you in doing a Calculation of Value. This will help you determine whether your business is or is not ready to sell.

If it isn’t ready to sell, Harvest Business Advisors can provide you with some ideas as to how to improve your business so it becomes more valuable. If it is ready to sell, read on.

Considering Selling Your Business? Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.

First, ask “What makes my business attractive?” 

This is an important question – for in the answer lies your strategy for marketing your business.

Is it the type of business? Is it the quality of my staff? Is it the specialization of my business? Is it my customer base? Is it my recurring revenue or repeat customers?  Knowing what makes your business appealing also sets the stage for attracting buyers once the business is on the market.

Once you know what is appealing to a potential buyer you may need to implement some changes.

It’s possible that you might need to:

  • Increase profitability,
  • Increase the size of your business,
  • Develop a stronger management team,
  • Expand your customer base to avoid the issue of customer concentration.

Next, assess the readiness of your business for sale.

There are essential elements of your business that need to be in place in order to sell your business.

Take a hard look around your business and ask yourself these questions:

  • Are my books in order?
  • Do I need to tie up loose ends such as ensuring that my key employees have non-competes?
  • Are my facilities clean, tidy and showing my business in the best possible light?
  • Have I implemented and recorded essential business systems so the next owner can step right in?
  • Have I documented the sales and marketing process?
  • Do I have a clean balance sheet?

Finally, maintain confidentiality

Until your business is sold and the transaction has been completed, it’s important to maintain complete confidentiality. It is unwise to let vendors, customers, lenders, and/or your landlord know of your intentions. While you may think these parties are capable of keeping a secret, there’s a good chance that they aren’t.

At the same time, do not tell employees (other than those who need to know) that you plan to sell. Employees may lose motivation, may not like the new buyer, and could also leak word of the sale. The best practice is to not tell them at all.

Once you have prepped your business for sale, you will need to assemble your business exit team. We will discuss that process in our next blog post Assembling Your Business Exit Team.

This article was written by Harvest Business Advisor Partner Richard Stopa.

 


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.

A Quick and Usable Year-End Succession and Strategic Planning Method

Business owners and particularly owners of construction firms often find planning a waste of time either because “things keep changing” or because “we go through this whole process and then do not look at the thing until next year”.    The very simple system explained below is designed to address both of those issues.  Of course, you must develop the practice and habit of monthly review to fully implement this program.

Time to Sell Your Construction Business? Please click here to download the e-book, “A Contractor’s Guide to Succession Planning”.

Planning:

  • You build projects from plans and specifications.  You build your business the same way.
  • Planning is an opportunity to receive input from your team.  In the process they assume responsibility.  Many heads really are better than one.  This is also a very good start to delegation – a key to growing a business and creating value
  • Planning, as I mean it for most contractors is not 100 pages of fluff.
    • It is one page setting your vision, mission, and your major goals
    • It is a few pages of financial budgets or projections (including a work-in-process or WIP schedule for many firms) shown in terms of both dollars and some sort of meaningful units (usually jobs, but could be other units), perhaps monthly for the next year and then 2 to 4 more years annually.
    • It is a 90 day checklist of improvements (what is to be done, who is to do it, when is it due by) to meet the major goal and financial projections.
  • Depending on the trade or the size of your company you might add:  capital investment section, technology section, etc.  But the essence is major goals, financial and unit projections and a checklist of improvements.
  • The plan should be reviewed EVERY MONTH along with high level management KPI’s (Key Performance Indicators).  Every month, the 90 day goals section should be updated with new goals as the old ones are accomplished.
  • A critical part of any plan is the succession portion.  If succession is always discussed as part of the process of running a business, then it will not be unusual or shocking to people.  Further, as secession event can be promoted as the opportunity it is for management growth.  Clearly this section might only be discussed with the higher level management team and outside advisors, but it should be part of the process.
  • Proper planning and management of budgets and KPI’s is essential to the growth of any firm.  It is the equivalent of an architectural plan for our firm.  If you are not regularly engaged in this process – ADD IT.

From the Whitepaper, “Whats Your Number, A Contractors Guide to Contingency and Succession Planning”(While geared to Contractors the paper is great advice for all business owners and their advisors).


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.

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