Sign In

Sign In


Building a Soho Business?

Building a Soho Business?

You’re finally realising your dream of becoming a business owner. Your Soho business plan is in full swing, and you’re setting exciting goals for what you hope to achieve. Planning for the sale of your business from day one will help ensure a more profitable sale and a smoother experience during what can be a stressful time. So, even though you’re establishing your new business, it’s essential to keep an eye on the future and ask yourself what a prospective buyer will look for.

What are you worth?

This is probably obvious, but profitability and net worth will be buyers’ primary goals. They want assurances that business revenue will be able to cover their financial obligations and allow them to maintain a favourable net worth position as they become the sole proprietor. These are just a few of the questions that will be at the forefront of their decision-making process:

  • Is the business turning a profit, and will it continue to do so?
  • Is there a possibility for growth within the industry?
  • Is the business in any debt, or will it require significant capital expenditures outside the initial sale agreement once ownership changes?

This is where your ability to keep accurate records and well-organised documents will come into play. If you have documented sustained success, buyers will be eager to join while things are looking up, and they’ll be highly motivated to sign on the dotted line.

Can your business survive without you?

Can your Soho business stand independently, or will everything crumble in your absence? Some businesses are so dependent on the current owner and their multiple roles in running the business that a new owner could mean a murky future for its sustainability.  This raises a glaring red flag for potential buyers.

If the business depends entirely on one person, whether it’s the owner or a key employee who might leave, the business may not be saleable. This is something to keep in mind as you move forward. As you grow, surround yourself with trusted staff and delegate responsibilities. Your business should function with many moving parts that can help pick up the slack if one of those parts changes or moves on.

How strong is your brand?

As your business matures, it will start to build a reputation. If your company’s brand has been negatively affected by poor service or a business crisis, this can greatly affect your ability to sell in the future. Do your best to ensure your brand is vital within the community and industry. You can’t control everything, but the more you focus on your brand and reputation, the more you benefit from future negotiation processes.

Are you different?

Strong businesses can differentiate themselves from competitors by offering distinct products or services. Potential buyers will thoroughly examine your company’s products and operational processes to help assess the strength of your company’s market position. Along with market position, buyers will also consider if you have an established customer base that will remain with the business after the sale.

The greater your ability to demonstrate a large and loyal customer base, the more appealing your company will be to buyers. This broad overview of areas to maintain as you build and grow your business. The most crucial point to remember is that the earlier you start planning for a future sale, the better.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *