According to this survey, almost two-thirds of Australian business owners would seriously consider selling their business if approached. However, at the same time, over 50% say they are not ready for a sale. Do you feel you belong to this majority of Australian business owners? Then it is very likely that you are exposed to waste.
Maximising value and opportunity
Willing to sell your business but knowing, you’re not really ready for it simply means that you are not ready to get the best deal.
Business owners would sell their business despite knowing they are not ready for a sale, and consequently sell at discounted rates (unrealised value).
Or, perhaps even worse, they would not be in the position to sell if someone knocked on their door, no matter the price (unrealised opportunity).
How to overcome common challenges when selling your business
When it comes to a sale, these are common challenges Australian business owners face:
1. Limited control
You never know when YOUR sale opportunity arises. It may be tomorrow.
Getting prepared today means you not only decrease the risk of missing an opportunity, it enables you to get in the drivers’ seat to pro-actively identify potential acquirers.
2. Process
Due diligence processes when selling your business take a long time and consume valuable resources that cannot be used elsewhere. And they often fail.
The better you prepare for a sale process, the better your chances are to successfully cut a deal, with minimum disruption to you and your business.
3. Competition
The average Australian family business owner is about 60 years old, and the proportion of owner-managers in the 60-69 age bracket almost doubled between 2010 and 2013. Due to the baby boomer generation, the trend will continue.
Being ready for sale provides you with a comprehensive competitive advantage.
4. Lower valuation
Most businesses are not as valuable as business owners think.
Preparing your business for sale now not only enables you presenting your business in the best possible way. It also provides the opportunity to pro-actively address risks and issues that may dilute your business’ valuation at sale.
“By failing to prepare you are preparing to fail” Benjamin Franklin
I fully understand that business owners are very busy, dealing with day-to-day business and putting out fires.
Having been CEO of small- and medium-sized businesses, I often felt like being on a hamster wheel, running faster and faster but going nowhere.
However, if you are like me and can’t cope with waste, put yourself in the driver’s seat. Don’t wait until an opportunity arises, and then see if, or how, things could work out.
There is no time like the present because the cost of non-action is always underestimated: The longer you wait to address potential issues, the more you expose your business to risk which will decrease its value.
And the less likely it’ll be that potential acquirers are interested in closing a sale transaction.
So start preparing NOW and increase the valuation of your business at the same time!
Time better spent – Connect with Arvind
Preparing your business for sale and increasing its value at the same time is part of ‘future-proofing’ your business and having it ready for seizing YOUR next opportunity, whether it is an exciting acquisition, planned succession or a lucrative sale.
If you as a business owner feel you need help getting ready for sale, please get in touch on 0419 015 873
or arvind@arvindsridharan.com.
Tomorrow you will wish you had started today!
