r goods business considering a sale, including small to medium-sized businesses in the sector. Small businesses form the backbone of the Australian economy, contributing a whopping 35 per cent of the country’s GDP and creating 45 per cent of private-sector jobs. But despite the challenges of turning your company into a successful operation, selling it can actually be the most difficult phase. To help you ride out all the complexities and emotional turbulence of selling your business, and to really optimise the value of the business for potential buyers, here’s what you need to focus on. Ensure your processes are well-documented There’s a reason some of the smartest minds in business attribute their success to due diligence. It means they investigate every nook and cranny of a potential acquisition to ensure nothing untoward flies under their radar. Expect any interested parties to review your paperwork first and foremost. Your job will be to make their lives easier by documenting and organising all relevant processes in writing. Central to these will be your company’s financial records, including any and all bank loans, P&L statements, financial forecasting and your outgoing costs breakdown. You’ll also want to detail your operational documents, including information on your suppliers, stocktake, marketing comms and business-registration papers. Equally essential will be operations manuals that provide the framework for your employees core activities in each key functional department.  Then there are the legal documents, like contracts for employees and clients, leases, OH&S guidelines, trademarks and IP, and franchisee agreements if relevant. Review your financial history – and get valued appropriately In a perfect world, your company credit report will be squeaky clean – no loan defaults, no missed payments. Everything will be spotless and encourage interested parties to purchase a company with an excellent financial track record. That won’t always be the case, but you can be absolutely certain that any serious buyer will get a hold of your financial history at some point during their due diligence. That means that if you have any financial skeletons in the closet, be upfront about them – declare any outstanding debts, take care of pending loan repayments and be honest if you have a poor company credit history. If you have strengths in other areas of the business, this might not necessarily be a dealbreaker, particularly if the buyer has benchmark capability here, but transparency is critical.  The state of your company’s finances may affect its valuation. So before putting your business on the market, make sure you get a professional business advisor to go through your paperwork and alert you of any potential issues. Your accountant and lawyer will also be key in this process. Communicate with your team Any business is only as valuable as its people, which makes the purchase of any company a risky prospect if there’s a lack of buy-in from staff. Culture clash can lead to once-successful businesses shutting up shop mere months after ownership changes hands – all because the new owners didn’t mesh well with the existing staff.  While you can’t control how the new buyer will manage your people after you leave, you can help make the transition smoother. Aside from giving your people plenty of notice about the sale, give them the opportunity to ask questions about how the business will be managed moving forward. When it comes to your leadership team, it’s essential that they understand and can buy into the future vision of the new owners. Buyers will often be looking for continuity of talent in key functional areas and it is your job to reassure the potential buyer that you have made every effort towards that goal. Similarly, it’s worth speaking to any serious buyer about how they can help your people adjust to new management. Any savvy investor worth his or her salt will understand that a smooth transfer of ownership is the best way to keep a company stable. Just as you want your company to sell for a good price, you always want to protect the livelihoods of the people who helped make your company what it is today. In all things, communication is key. Scalability is sellable One of the most attractive features of your business isn’t what you have already achieved, but what you are set up to achieve in the years to come. A strong future pipeline of steady clientele, potential expansion into new markets, categories and channels, and an understanding of new and evolving technologies – and how they can help your company stay ahead of the competition – are critical to the valuation of the business.  Predictions are one thing, though. In order to show that there is clear value in your company’s future, you’ll want to showcase a scalable operating model. This means you have the agility to react to market changes in a positive way – whether that’s having the necessary revenue to grow your team quickly, or the analytics tools to derive valuable information for better decision-making. Proving that your business can scale and pivot with ease is a sure-fire way to turbocharge your company’s value. What do investors want in a business? There’s no one-size-fits-all criteria for investors – what will influence buyers to actually make an offer on your company will differ from person to person, and also the type of industry you are in. However, there are some key indicators that your business will sell well: Profitability: The e-commerce success stats don’t make for happy reading – 90 per cent of startups in this sector fail within the first 120 days. That means companies that can prove they have healthy margins, steady cash flow and good overall financial modelling will be in the best position to sell.Competitive interest: While not true of every acquisition, having the serious interest of multiple buying parties is always a good sign (and will help optimise the exit price).Brand awareness: Is your company well-known not just in industry-specific circles but also in the wider community? Have you gained traction online, on social media or among other successful business people? Whilst brand recognition (together with goodwill and intellectual property) is classified as an intangible asset,  a well-known brand will invariably sell better than an unknown entity. Consistency: A company whose revenue is growing rapidly and sustainably is one that likely won’t have any worries about selling. Financial traction could be the clincher for a big sale. Legacy Consider how important it is to create a lasting legacy. Some business owners are able to remove all emotion from selling a business in which they may have toiled for many years. For others, it may be very important that the core purpose of that business and its impact on key stakeholders is somehow preserved. This can be as straightforward as creating tools like powerful brand guidelines to ensure that the brand DNA is not diluted by future custodians. Or it can be as comprehensive as building key deliverables into the constitution of the business or by signing up to become a benefit corporation. The former founder of Wholefoods Supermarkets, John Mackey, expressed his great regret that he had not made the business a B Corp before selling it to Amazon. He has lamented the fact that many of the organisation’s previous commitments to people and planet have diminished in importance under new ownership. Navigating your business sale in a Covid world There’s no getting past the fact that the coronavirus pandemic has irrevocably changed our society. Economically speaking, it will likely take years for the country to recover – and that’s by conservative estimates. How that will affect business sales will depend on a range of circumstances – industry type, company valuation, the state of the commercial buying market, investor confidence and much more. However, there are positives amidst the disruption. Some companies are pivoting their business strategies in order to reach a wider market or to align with evolving customer behaviours – and thus become a more attractive prospect for sale. And while there may generally be fewer investors in the short term, there will also be fewer good companies to buy, especially ones that can prove steady finances despite the effects of Covid.  At the same time, there will also be some buyers with strong balance sheets who will be looking to pick up some ‘bargains’ in the form of distressed businesses. Their targets will most likely be well-known brands that have lost their way financially but with the potential to be turned around with better strategies. But in these cases, the sale price will be far from optimal and disappointing for owners who spent years building the brand. Just like home buyers looking for the ‘perfect time’ to get into the property market, investors now have the ability to take their time and find the right fit for their portfolio. All you can do is focus on what you can control: your customers, your people, your business offering, operational discipline and your strategy to continue growing and thriving.