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​Follow these steps to make a hefty profit.

After years of hard work building your business to where it is today, do you really want to close it down, just so you can move on? Seeing it thrive on its own whilst you’re working on something new is perhaps far more fulfilling, plus there are profits to be made from its sale. So, how much is your business worth? If you’ve followed our previous blogs, you might have a good idea, but if you want to sell your business and make a tidy profit think about implementing these steps:

1. Develop a self-managing business.
The more you work within a business — the more owner-centric it is — the less it’s worth. If you are the centre of activity and everything revolves around you, stepping away from the day job becomes nearly impossible. Depending on your sector and particular situation, production may stop, staff won’t have guidance, and revenue will grind to a halt.

Instead, having a select group of reliable individuals that manage the business on your behalf means that:
You can oversee the management of the business from afar and keep an overview of each department without getting too entrenched in the day-to-day details.
Your buyer can jump right into their role. With good management skills and knowledge that they can rely on their team leaders, your buyer can gradually learn the business with no interruptions to the company’s running.
A well-organised, well-oiled management structure and a trustworthy staff team where everyone knows their roles and responsibilities make for an enviable situation. The owner’s role becomes more about the company’s future than confronting internal problems.

2. Establish reliable and repeatable systems.
Combined with excellent management capabilities, using dependable and repeatable systems in a business brings efficiency to a new level. Systems reduce reliance on individuals’ knowledge or processing ability; they streamline workflows and set a benchmark or standard to meet.

Systems are also measurable, so you can monitor processes more closely, identify successes and work on challenges. They can be applied business-wide and at different scales, too, from your production line to your smaller accounting tasks, providing a level of detail that’s right for you.

Finally, having systems in place will support any business expansion you embark on. Your tried and tested methods can be immediately applied to new departments or locations, making growth quicker and easier.

3. Refine your product or service.
A business that knows its raison d’être is far more valuable than one that is trying to be everything to everyone. If you come into the latter category, try to refine your offering or products, carve a niche for yourself and focus on doing that job well.

Doing this is more efficient mentally (you’re juggling far fewer balls) and financially as you streamline everything to reach one end goal. It also means you’ll stand out from the crowd and, if you make a big enough name for yourself, be the go-to place for whatever product or service you offer.

To make your business an even more desirable purchase, focus on selling a unique product or service that needs to be regularly renewed or replaced and which customers can buy by subscription, as suggested by John Warrillow in his book, Built to Sell.

4. Know your customer.
If you know who you’re selling to, you can finely tune your lead generation strategy and consequently receive more leads. Compounding increased leads with a higher conversion rate means you can significantly increase your customer base and, therefore, your revenue.

All this, however, is based on understanding your ideal client: where they go online, what their needs are, how to communicate with them, and beyond.

Equally, don’t be entirely reliant on one customer. Let’s say one client represents 50% of your revenue. If they decide to go elsewhere, you’ll lose 50% of your income instantly. Spreading your income over many customers reduces the risk of quickly losing large chunks of revenue.

5. Develop a solid financial position.
Your business’s financial situation is also a crucial aspect to consider when thinking about selling, but it’s not only the bottom line that counts. Your finances are partly a culmination of efficiently carrying out the above points — making sure you have a slick operation that knows its product and target audience — but beyond that, what are your debts and the terms of those debts? What’s your cash position or liquidity? And what’s your cash flow like?

Each part of the bigger financial picture of your company can be refined. Our free business profits review can help you identify what’s going well in your business and where you could improve. The review will look at your lead generation and conversation rate, your outgoings such as staff costs, overheads, and rent, and your current profits to show you where you stand right now. We’ll then give you a customised outline of how best to achieve growth with achievable goals to help you improve.

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