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CORPORATE CLEANUP
Your chief overall task is to make your company as appealing a property as possible. Even if you've been slack about aspects of operations or finances, there are numerous actions you can -- and should -- take during the pre-selling phase to enhance your company's value.
For example, when a house owner prepares to sell his property, there's often a flurry of long-deferred activities -- foundation cracks get fixed, fences painted, garages cleaned, and so forth. The same type of situation applies to businesses. The preparatory steps can take countless forms. Sometimes it entails correcting problems -- say, if there are some "messes" to clean up, such as lingering lawsuits or personnel conflicts. Or they might include the active pursuit of improvements -- such as running a marketing campaign designed to boost quarterly revenues.
What you must do is anticipate all the things that prospective buyers will assess and investigate. And remember: No matter what, there's always something wrong with the business, and a good buyer will try to find and exploit that. Meanwhile, a smart seller minimizes the number and severity of problems before a buyer comes along to point them out.
As I've stressed before, it is critical to start the remedial process as early as possible. In fact, even if you are not currently interested in selling the company, it is a good idea to prepare your company as if you are looking to sell as soon as possible. Markets can change quickly. If another company offers you a deal you "can't refuse," you will be in a good position to negotiate.
However, cleanup often doesn't begin in earnest until after the seller has hired a broker. In such cases, the first stage of working together will involve the broker diagnosing a company's weak spots and prescribing the necessary remedial measures. The broker will make his recommendations and agree to return in a couple of months to follow up and assess the situation. In fact, it's not uncommon for a good broker to slam on the brakes until problems are cleared up; the seller thought the company was good to go, but the broker thought otherwise.
