Success in 4 Easy Steps
If building a business from the ground up was easy, everyone would do it. From finding the right product to sell, sourcing and developing it, getting it live on your site , to building a loyal and invested customer base, the hurdles are endless. These are a few of the reasons why people look to buy businesses already set up, also known as turnkey businesses. Turnkey businesses are businesses and brands that are ready to make sales on day one. All the buyer has to do is maintain current operations ensure sales are being generated. Let’s review the initial and pivotal steps you should follow before listing your turnkey business in order to best capitalize on your sale.
Take Business Inventory
Start off by taking a complete inventory of your business. Inventory is not just your sellable assets but also all the aspects that go into running the business smoothly. Make sure to catalog all the software, systems, and processes that are responsible for day-to-day functions, as well as the contracts you have with any clients or external suppliers.
It will be beneficial to lay out everything you do for the business, how long it takes, and any additional details for the future buyer to take note of. There are bound to be things you do that no one knows about and processes that only live in your head. Writing them all down will make for a smoother transition at the sale. If you have employees, this is also the time to figure out who will be kept on and plan your conversations with them when it’s time to sell.
Establish a Selling Price
Next, you will need to determine the price at which you want to sell. Settling on a price requires you to consider the company’s assets, the current revenue driving sales, and the potential for additional income. Your assets are what you physically own, like inventory, the building, and equipment. Then the rest is determined by a review of your profit and cash flow, balanced with the earnings you will be looking at in the next few years should everything remain the same.
Once you have determined your sales price, it is time to pull together the paperwork that you will need to persuade potential buyers into buying. Documentation should include all of the processes and assets being sold, alongside proof of how the business is doing. As the seller, you need to show the business’ success through tax returns and financial statements over the past few years. This information and proof will make a buyer more comfortable when they start looking into the details and background of your business upon approach.
This is why we suggest that you get all of your business’s processes down on paper, so a buyer can look through the way things are done and evaluate if they see potential in your company. Don’t forget, you always want to have a Non-Disclosure Agreement (NDA) in place before beginning any conversation with a potential buyer to ensure the buyer cannot take off with important company documents, numbers, or information that should be kept private
The last step is to list it, which can be done on several websites online. If you own a Shopify store, the platform offers a site to buy and sell online stores called Shopify Exchange Marketplace. If you follow the tips in this guide, by the time you list your business for sale, you should be fully equipped to hand over your turnkey business to any potential new owner. Click here to know how to choose your online business selling platform.