Preparation is the key to maximizing a sale.
As we take on a new year, there are many things going through our business minds: can we beat the numbers we hit in 2021; have we overcome the hardships we endured in 2020; is it time to sell the center?
Many businesses had a great 2021 year financially. The downside for many was the fact we could not find employees to help take care of the great business we saw walk in the door. Many owners are not sure they want to fight the fight anymore; being a great sale year, maybe it’s time to sell when the numbers are up.
Here are a few things to keep in mind if you are considering selling your business this year:
- Make sure you consult your team. Speak with your family members, your partners, your accountant, your broker, and your attorney. You and your team need to be on the same page.
- Make sure you have updated, clean financial statements prepared. It will be good to have three years ready for presentation to a buyer once they have qualified. This is crucial to have prepared for the buyer so they can present it to their bank. This information is needed to support your asking price.
- Make sure your facility is in pristine showing condition — clean and presentable inside and out. Make a list of updates made to the facility in the last three to five years, including HVAC and roof.
- Establishing your list price will be crucial. We all want the most we can get for our business, but remember, the bank will only finance on cash flow (EBITDA). The market typically shows a bowling center will sell five to eight times cash flow. Solid financials will set your asking price.
- Remember a business sale is more complex than selling a home. It will take time and it will require patience. Be prepared for low offers — it is part of the game.
- The structure of a deal is usually more important than the price. This is where the expertise of your accountant and attorney come into play.
- Your staff is very important in a sale. Remember, most buyers do not bring their own employees with them, so they will want to know about your key people. The other issue is when to tell your employees about the sale; this is up to you, as there is nobody that knows your staff better than you and how they will react.
Selling your business is not an easy decision. It is imperative that once you decide to move forward with the sale, you are all in because the process is long and can be tedious. After preparing your business for sale – from the financials to the facility, to your staff — you will walk away happy and ready to start the next chapter of your life.