How to Prepare Your Small Business for Sale: Insights from Barbara Schenck

The Importance of a Sell-Ready Business

Barbara emphasizes the importance of having a sell-ready business, even if you are not actively looking to sell. She believes that many small business owners miss out on the opportunity to sell their businesses because they are not prepared. Barbara states, "Keep your business ready for sale all the time." This means having strong financials, a clean legal condition, a strong brand and reputation, efficient operations and organization, a strong market and industry presence, competitive products, a committed and growing clientele, and transferability.

Building a Sell-Ready Business

To build a sell-ready business, Barbara suggests several strategies. First, she recommends looking for potential partners or successors within your business who can share the responsibilities and take over when needed. This ensures that the business can continue to operate smoothly even without your direct involvement. Additionally, Barbara advises getting your finances into someone else's hands, such as hiring a CFO or outsourcing financial management. This allows you to focus on other aspects of the business and ensures that the financials are well-managed.

Another important aspect of building a sell-ready business is developing a strong brand and reputation. Barbara suggests conducting a Google search of your business to see what comes up. If there are negative reviews or a lack of online presence, it's important to address these issues and work on building a positive brand image. Barbara states, "Your brand is what other people say about you when you're not in the room." Therefore, it's crucial to have a strong brand that customers value and trust.

Timing and Preparation

Barbara recommends starting the process of getting your business sell-ready at least 18 months in advance. This allows enough time to address any issues, make necessary improvements, and ensure that the business is in a strong position to attract buyers. She advises going through a checklist of red flags and addressing any weaknesses or areas of concern. This includes addressing low earnings, high competition, weak operations, declining industry or market conditions, and legal, financial, or operational problems.

The Value of Strategic Partnerships

Barbara highlights the importance of strategic partnerships in building a sell-ready business. She suggests hitching your business to the strongest horse by partnering with reputable and well-established companies. This can help boost your brand credibility and attract more clients. Barbara states, "Brands happen to attract brands." By aligning yourself with strong partners, you can enhance your reputation and make your business more attractive to potential buyers.

The Bottom Line

In conclusion, preparing your small business for sale is a crucial step in maximizing its value and ensuring a successful transition. Barbara Schenck's insights shed light on the importance of having a sell-ready business and the steps involved in achieving this. By focusing on strong financials, a clean legal condition, a strong brand and reputation, efficient operations, and strategic partnerships, small business owners can position themselves for a successful sale. It's never too early to start thinking about selling your business and taking the necessary steps to make it sell-ready. By doing so, you can capture the final round of value and achieve a successful exit.

In this article, we have explored the key insights shared by Barbara Schenck during our conversation. By focusing on building a sell-ready business, small business owners can increase their chances of a successful sale and maximize the value of their businesses. The implications of these insights are significant, as they highlight the importance of long-term planning and preparation. As the small business landscape continues to evolve, it is crucial for business owners to adapt and position themselves for success. By following the strategies and advice shared by Barbara Schenck, small business owners can navigate the process of selling their businesses with confidence and achieve their desired outcomes.