***Advertisement: Ascent Partners 11 August 2010***

With real estate sales it’s all about position, position, position, but with business sales it more about “positioning” – positioning the business to attract the best buyer. Richard Rasmussen from Ascent Partners elaborates.

No matter what stage of the business lifecycle you are at, you need to consider “positioning” your business to achieve a sale. Even if that sale may be many years away, you should be considering how to exit. Who are you trying to position to? Here are some common alternatives:

1.    Position it to sell to an employee or group of employees
2.    Position it to pass on to a trade buyer
3.    Position it to pass on to a family member
4.    Position it to merge / form alliances with others

Knowing who to position it will help determine what you need to do to the business now to make it more attractive. For example, you may not have the option of 1 or 3, so you need to focus on 1 & 4.

Using that example, say you are a $3,000,000 turnover commercial printer and you think the logical buyer would be a larger printer, who needs the turnover but perhaps not much of the equipment.  So, here you may develop options about how to best get to that end result, in your time frame.

With this profile, at time of exit, where you don’t want to be is where you have negative equity in equipment, and an unattractive client list. So maybe the best option is to pay off equipment in the lead up to a sale, and build a client base that is easily transferred and perhaps offers growth potential to the larger printer.  

Below I list, in general terms, ideal business attributes that buyers are, and will continue to be seeking:

1.    Sustained profitability
2.    A client base that is steady, provides the ability to grow and is transferrable
3.    Desirable service / product offerings – such as on line ordering, digital print, niches
4.    A good, sustainable business model
5.    Good technology equipment – doesn’t have to be the very latest and greatest, but needs to be competitive, and servicing a growing market
6.    Good systems and infrastructure

Now, how does your existing business rate? How many boxes does it tick? What are you doing to make it more attractive in one or more of these areas? It’s not just where it is now, but where it needs to be when you want to move it on.

Pick the points to focus on that will be attractive to your potential buyers. Recognise that you may never have, or should all, all six attributes, and start thinking about a transition plan. 

You may well decide that you’re never going to be able to update equipment, and you’re fighting a losing battle to ever be really competitive, and the days of a traditional small to medium commercial printer are numbered. That’s fine, recognise it, and understand you’re not alone (plenty around in that boat).  It’s really what you do from there that is important. Develop your options and then work towards positioning yourself / your business to your target market. If you do that, you’re much more likely to achieve your financial and personal goals.

Ascent Partners work with print-related businesses around Australia to look at where they are now and help them develop options to position them to sell, either now or in the future. Contact Richard Rasmussen on 0402 021 101 for further information