Preparation separates winners and the losers in the business-for-sale marketplace. But some sellers start preparing months or even years before they list their companies and still fall short when it's time to execute the sale.
Why? Because the task of gathering and organizing the information buyers need to make informed decisions can be overwhelming. To effectively prepare for a sale, sellers need a more efficient way to manage data and information.
And that's where technology enters the picture.
There are two kinds of sellers in today's marketplace.
At BizBuySell.com (my employer), we see two categories of sellers:
Low-Tech Sellers - It's surprising how many sellers have operated their businesses using a minimal amount of technology. When they prepare to exit their companies, they cobble together pre-sale documents and disclosures from spreadsheets and paper files.
- Tech-Friendly Sellers - Other sellers have embraced technology with open arms. If they didn't inherit systems and solutions when they acquired their companies, they have strategically implemented technologies during their ownership tenure.
Not surprisingly, the information low-tech sellers provide to buyers is frequently inaccurate, incomplete and out of date.
Tech-friendly sellers, on the other hand, fare much better. The information they provide buyers paints an accurate and complete picture of the business. More often than not, the result is a higher sale price and a shorter time on market.
Selling a business? Here are some technologies you can't live without.
It's never too late to implement technologies that will help prepare your business for the marketplace. Regardless of where you currently fall on the technology spectrum, there are at least five types of technologies that are worth considering:
- Accounting Software. Accounting software is the low-hanging fruit of small business technology. Affordable and user friendly, today's accounting solutions streamline bookkeeping and tax preparation routines. But more importantly, accounting software simplifies the preparation of pre-sale financial documents and increases prospective buyers' confidence in the accuracy of historical financial data.
- Inventory Management Software. Inventory management solutions automate inventory routines and are useful for ensuring that the business has the right inventory on hand at the right times. Sellers can use inventory management software to generate real-time inventory data during the sale process if the software has been integrated with the company's point of sale and/or e-commerce technology.
- Customer Relationship Management (CRM) Software. CRM solutions manage and organize the company's interactions with customers. From contact information to appointment scheduling to customer service, a robust CRM serves as a focal point for developing and nurturing customer relationships - the kinds of relationships that have real value to buyers.
- Computerized Maintenance Management System (CMMS). CMMS technology automates equipment maintenance routines. Although a CMMS plays a more central role in manufacturing and industries with high equipment requirements, a basic CMMS benefits the sale of any business. In a small operation, a CMMS can be a repository for purchase data, repair histories, permits and inspections.
- Web-based Assets. Web-based assets take time to develop. But from a buyer's perspective, they are as important (maybe even more important) than any other technology asset the company owns. If you haven't invested in your company's online presence yet, a current website and active social media accounts are good starting points.
If you're concerned about the cost of implementing new software at this stage of the game, don't be. Cloud technology and SaaS have made these technologies viable for most small businesses.
And in the end, the amount you spend on the implementation of core technologies now could pale in comparison to the financial benefits they deliver when your company hits the market.