It’s more than likely that your RTO is one of the most valuable assets you own. But if you decided to sell today, what would a buyer be willing to pay? While preparing your business for sale might seem a pointless exercise if you have no plans to sell, it can be a great way to make sure your house is in order.
The Small Business development Commission of WA has put out information that is worth reading.
A potential buyer wants the same as you – good cash flow, easily accessed records and a business that doesn’t need constant attention in relation to simple day-to-day tasks. Why wait to make those changes when you could be enjoying the benefits yourself now?
1. Make yourself redundant
Make it easy for a buyer to step into your role. If you hold all the knowledge and skills to run the business, the buyer’s greatest fear is that the business will walk out the door when you do.
Document the policies and procedures that currently exist as unwritten rules. Systemise the various functions of your business and create a procedure manual. The additional benefit of getting the information out of your head and onto paper, is being able to outsource some of your tasks and get back to doing what you know best.
2. Record your relationships
Document the relationships that are key to running your business. Wherever possible, convert verbal agreements with suppliers and clients into written agreements. Having these in writing will make your business appear stronger and build confidence in potential buyers. It will also give you a clearer picture of the health of your business.
3. Order your finances
To demonstrate the true profitability of your business to a potential buyer, ensure your financial records are up to date.
- Collect all payments that are overdue from your clients. Potential buyers may be discouraged from buying a business with clients who take a long time to pay their accounts.
- Make sure you are not late with payments to your suppliers. This will create a positive impression of the financial strength of your business.
- Produce monthly profit reports to demonstrate your ability to monitor and manage the performance of your business.
Assessing your finances also provides an opportunity to track down missed invoices and recognise the source of your best profits. Regular reporting helps to stop things slipping through the cracks, while you get on with the work that actually brings in the money.
Sounds familiar and makes sense doesn’t it….for more information visit their website.