With the business environment continually changing, businesses may often find different reasons to sell up. However, it’s important to have the right skills and expertise to ensure a smooth transaction. Here, Matthew Hayes, managing director at Champions (UK) plc, gives his insight on the five questions he would ask himself when selling a business.

Does your business stand out?

In every aspect of life, there are elements of competition. Ask yourself, how much does your business stand out from the crowd? Are your USPs unique, or are they just like everyone else’s? What is your niche? Is there something that makes your business the best at something? You will get the maximum value if your business is defined as the best at something within the market. All those things successfully drive valuation.

2. Do you have a proper handle on what is the most valuable aspect of your business, data?

Data is the new oil; it is a stand-alone commodity. However, most businesses have a huge wealth of data but no real organisation or understanding of it. The biggest form of data is customers and clients. Do you have a good understanding of where your business makes money, as well as an understanding of who’s buying from you or how frequently they’re buying? Do you know what the lifetime value of that client or customer is? These are all important factors.

3. Is your business well organised in terms of people and systems?

Efficiency is absolutely crucial when it comes to someone buying your business. No one wants to inherit your mess – that will devalue your business. You should consider if your business is well organised, and whether it has a team of capable individuals that are able to drive the business forward, with a strong understanding of their own responsibilities. Representatives have never had more ways to communicate with prospects and a business’ general audience, but if the right tools aren’t in place, things become more difficult.

4. Are you maximising and leveraging technology?

Utilising the latest in technology is vital. There are forms of automation across everything, particularly around areas like HR, data management, lead management, sales and marketing activities, and accountancy. If you’re not utilising technology to the highest regard, then the reality would be that people end up filling in that gap.

The problem with this is that people make mistakes and can be expensive, so you’ve got a higher cost than you should have, and a more disorganised way of going about it.

A business sale involves many other questions, since this is probably your biggest asset you are selling. You should consider the impact it may have on you and others. How will this impact the business short-term if you have an alternative or no role going forward?

Work on it. Not in it.

5. Can it easily be managed without you?

Most believe that they are adding the most value if they make all the decisions, but if you cut the strings, what happens? Does everything collapse? Does the business no longer function, or do you release the business to be a bigger and better version of yourself?

You’ve got to create a scenario that’s the latter of first. A lot of founding entrepreneurs aren’t necessarily micromanaged, but they’re the determent of the business.

That could be the day-to-day determent, but definitely when it comes to the valuation, because anyone coming into that organisation has to consider that individual is going to be removed from the business within the near future.

Even if they want to continue, the new owners might not want them to, as it’s hard to drive change with the existing founder still present.

With so many areas of consideration when it comes to selling a business, are you confident to carry out this activity?

****Contact Champions (UK) plc to find out more about how they can help you to sell your business smoothly and efficiently.