Our business sale diagnostic tool turns 1
There have been vast improvements in artificial intelligence (AI) capabilities and availability this year. In this blog I look at the opportunities and risks that AI can bring for charities.
What is AI?
Time flies! It’s now been a whole year since we launched our business sale readiness diagnostic tool. This free online tool was designed to help business owners like you, who may be thinking of selling a business, to self-assess:
- How attractive your business is for sale
- Whether you will maximise the final sale value
- How smooth and efficient the sale process will be
Since launch day, our tool has been used by businesses of all sizes, across a wide variety of sectors from local to national firms. We’ve collated the average responses against each of the nine key factors within the diagnostic and identified some common themes.
In this blog, we’ve picked out some of the factors our respondents identified as most challenging, along with our own top tips for addressing them.
Sale Process Preparation
With an average score of 4.39 (out of 6), the sale readiness factor for which business owners gave themselves the lowest score was Sale Process Preparation; in other words, how prepared you are to undergo the actual process of a business sale itself.
This doesn’t come as a surprise. It’s often easy to focus on elements like how attractive your business is, how much profit it’s making and how up to date your records are, but most businesses don’t seek advice or support in preparing for the actual sales process, until they decide it’s time to sell.
To use a football analogy, you can have a team full of superstars that are all worth a fortune but if you don’t prepare for the actual game then you might not always win!
So, what can you do? Corporate Transactions Partner James Lay’s blog picked out four key topics worth considering before you’re ready to sell:
- Understand how much you’ll need from a sale and what (other than money) is important to you
- Understand and plan for the tax implications of selling your business
- Arrange for experienced corporate lawyers to support your sale
- Look for more information about similar businesses being sold in your marketplace in recent years
Scoring on average 4.65 out of 6, the second lowest sale readiness factor is People.
Very few businesses, especially smaller ones, can stand alone and deliver earnings without the support of key management. As an acquirer, the most common (and often most important) question asked of a selling business is: “What will happen to the people once I own the business?”
On top of this, the reason for most business sales is to help the existing owner to take a step back or even retire from the business. Often this business owner is controlling the day-to-day management of the business.
James picked out three key areas that you can use to demonstrate your business is ‘sale ready’ in another blog:
- Attract and retain good people – the lower your staff turnover, the more attractive to a buyer
- Build a strong management team – the further you can separate yourself from the day-to-day running of the business, the more likely it will succeed without you
- Staff morale and wellbeing – a happier workforce who feel supported will give a buyer confidence that they will stay and continue to perform in the future
If you haven’t already completed our free online tool then check it out here; it only takes five minutes to complete and the results are immediate.
If you’d like to talk about your results, or how we can support you further, then please get in touch. Alternatively, you can find contact details in the Our People section of the Larking Gowen website, you can call 0330 024 0888 or email firstname.lastname@example.org.
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