How to Create the Best Perception When Selling Your Business

Perception is reality when you are selling your business so it’s important to give the best impression possible.

You need to get tangible about the tangibles when selling your business. Buyers will likely pay more if they perceive your business to be an orderly, coherent, well-run enterprise.

That’s why good current documentation is important. This includes tangible assets such as facilities, inventory, machinery and other items.

A potential buyer will walk into your business and will visualize themselves there. Will they like what they see? Will they be inspired, enticed by it?

Spruced up buildings, grounds, parking areas, signage and equipment can convey prosperity, productivity and strong management. All should be in top notch condition and show well.

These observable aspects speak as a proxy for the thousand unseen things that are in the organization’s DNA.

What about your virtual facilities, you’re online presence? Well, get online and check yourself out. Do you like what you see there, too? Any posted materials should be relevant, recent and brand compliant.

Understand that potential buyers will go to your website and do an Internet search. So get out there and conduct a web search on yourself and your company or hire an outsider for an objective analysis and report.

Next would be inventory. Often owners keep inventory low prior to sale. Make sure your inventory is organized and presentable. You want to know exactly how much inventory you have and so will a buyer.

Our next topic is assets and machinery. Draw up a detailed asset list and review the condition of the machinery. Replace equipment that’s obsolete or ending its useful life. Or if return on investment is there, repair it.

You may be tempted to reduce expenditures for repair and maintenance prior to sale. Savvy buyers, however, will realize that and reduce their asking offer price knowing that they must spend that money to replace or refurbish the equipment anyway.

Next, is the technology running your business up to date, or have you gotten perhaps a little too much wear out of your current system?

Assessing how your technology resources, software, hardware and qualified staff affect performance might show you how to enhance it. Having up-to-date technology could make your firm more attractive to younger buyers.

If buyers perceive they will have to invest money to bring your systems up to date, they will offer you less money to buy it. That may be a trade off you’re willing to make, just be aware that you’re making it.

You will also need to document intangible assets.

Many businesses, large and small, own valuable intellectual property or IP: trade secrets, trademarks, copyrights and patents.

That can be the most valuable asset of a business. You should register domain names, copyrights, trademarks and patents. And remember, unlike trademarks, patents have a limited life, so record when they expire.

Many firms are purchased just for their IP. IP can have significant value and determine what buyers will be attracted and what they are willing to pay. So make sure you own it.

A prospective buyer will insist on IP records, especially records documenting ownership. If your firm has significant IP assets, a formal intellectual property audit is essential.

Your corporate attorney can direct you to experts who will appraise your IP and transferability to a new owner.

One more thing you will need to do before a sale is settle any outstanding actions. Clean up any current or potential legal messes. Resolve partnership and shareholder disputes and outstanding or threatened litigation as soon as possible. These can completely halt the sales process.

An astute buyer will collect outside information on past and present lawsuits, your credit history and that of your business, complaints by consumers and public agencies, the official status of the corporation or partnership and the existence of uniform commercial code and tax liens.

Do due diligence on yourself and see what a buyer will see, and take action. Be prepared to disclose and discuss issues that may surface.