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What improvements should be made before selling your business?

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You’ve made the decision to sell. How can you get the most for your business?

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It probably won’t be by putting it on the market as is, unless you’re one of the fortunate few who sell at the lifecycle peak. Too many owners wait until the business is in the decline phase and is daily losing value.

Wisdom from the real estate field works here. Maximize your curb appeal. Make quality upgrades that add value. Give your systems a tune-up. Clean up outstanding issues that might impede a sale.

Following this advice will cost money but if invested wisely, the return will be much more than the dollars spent. The improvements could also make the difference between your business being sold and languishing on the market.

Choosing improvements with the buyer in mind is key, and that’s why certain home upgrades are recommended while others are considered a wash or a loss.

In preparing your business for sale, you must do the same things – cast a critical eye over your enterprise and understand how your potential buyers will evaluate its desirability.

Technology

Technology – hardware, software and communications systems – is a vital part of company operations in most industries today. Sleek equipment, current software, and up-to-snuff security protocols give an impression of cutting-edge performance.

Conversely, outdated equipment and ancient versions of software give an immediate impression that your business is also functioning in the past – Slow, out-of-date, behind the curve.

Not only will new owners be required to make upgrades, probably resulting in a lower sales price, but that unfortunate impression might extend to company performance as a whole.

Potential buyers may cast a jaundiced eye over the books and market prospects for the company. How can you be positioned as a leader when your technology is obsolete? In addition, they will need to invest in moving systems to the new technology and training employees.

Before making any upgrades, determine the current standards in your industry. Identify trends impacting the use of technology. For example, if your competition is using point-of-sale software and storing data in the cloud, perhaps you should also.

The next step is an assessment of what you currently own and use. Over time, many companies end up with a hodgepodge of computers and software. Telephone systems and other office equipment should also be reviewed. Determine which upgrades are the most critical. Once they are purchased, you will need to be sure that employees are trained and that documentation regarding protocols and use are created or maintained.

Pleasantly, you may find that new technology reduces operating costs. Certainly hardware costs have come down significantly, and the availability of cloud-based software means a monthly payment instead of a purchase. Increased productivity might create a positive impact on the bottom line, which in turn makes the business more valuable.

Exterior, interior and equipment

Other capital investments you should consider involve signage, your premises, and business vehicles and equipment.

Signage is an often-overlooked asset that immediately conveys much more than the words displayed. A faded, broken, inadequate or outdated sign conveys a business on the decline. You’re used to it and so are your customers, but a buyer will see it with fresh eyes. New signs aren’t cheap, but they could make the difference between interest and an immediate turn-off.

Take a fresh look at the curb appeal of your premises. A good way to do this is to take photographs so you can view the building and grounds honestly, without bias.

Inside, how are the carpets and lighting? Faded and flickering won’t cut it. Layout is key, as is minimizing clutter and getting rid of junk. Old paperwork and outdated items tend to accumulate, often becoming invisible to those who see them every day.

If you don’t have time to purge and decorate, consider putting one of your more organized employees on the task or hire a professional.

Finally, check over your equipment and vehicles. If you can’t afford to upgrade or replace old items, at least clean and repair them. It’s the same philosophy behind detailing a used car. First impressions count.