Unless you proactively keep up with the latest trends, there is a chance that your business’s technology is a bit behind the times. However, according to one of Nashville’s-based business brokers, Beacon Exit Advisors, a small investment in technology now might make it easier to sell your business when the time comes. In today’s expert Q&A, we discuss a few key ideas that business owners should keep in mind when selling is on the horizon.

Q: Hello, and thank you for sitting in with us today. We recently had a question posed by a reader asking how long it takes to sell a business, and what they could do to ensure a smooth transition. The topic warrants more than a simple answer, so we would like to dive a bit deeper.

Beacon Exit Advisors: Absolutely. That is a very open-ended question. The best first piece of advice if you are looking to sell is to partner with an experienced business broker. It does not matter if you are in Nashville or San Francisco, an entity with multiple experts on hand can guide you through the process and make recommendations on ways to speed it along.

Q: What kinds of recommendations?

Beacon Exit Advisors: One thing your business broker is likely to suggest is to start with a business valuation. Not knowing what your business is worth can lead to a disappointing process. The business valuation is the foundation of an exit plan.

Q: Why is that?

Beacon Exit Advisors:  An experienced valuation expert does an analysis of your business, including financial information, management structure, customer concentration, tangible and intangible assets, and other areas to determine what your business might sell for in the current market. At Beacon Exit Advisors, our Nashville brokerage experts couple this information with years of experience to ensure our clients get the most out of their investment with as little disruption as possible.

Q: So it is not as easy as looking up the value of, say, a home?

Beacon Exit Advisors: No, not at all. There is an almost endless number of variables when determining the value of a business. Look at a law practice as an example. It is difficult to value because there are so many points to consider. In this scenario, valuation is not just a matter of the number of successes, but also the average amount of cash at stake for each litigation. Two law firms that have each won a collective $10 million might be valued differently if these victories were the result of many small suits compared to a small number of larger settlements.

Q: This all sounds very difficult to decipher. Changing our thought process, is there anything you might suggest to an entrepreneur that wants to boost or maintain their business’s value before selling?

Beacon Exit Advisors: There are many things they can do, including running their business as usual. But the best way to increase value is to spend a small amount of cash where it will make the biggest impact. We tend to advise Nashville entrepreneurs to invest in business-specific technology upgrades.

Q: What sort of upgrades?

Beacon Exit Advisors: It should start with hardware and software. A good business broker knows that buyers are looking for companies that can keep up with changes in the digital age. As a society, we want the latest, greatest tech in our day-to-day lives; business buyers are no different. It is expected that their target acquisition will have upgraded systems in place before making an offer. Companies that embrace current technology are generally more efficient.

Q: It sounds as though technology plays a key role in the buying and selling process.

Beacon Exit Advisors: It does, there is no doubt about that. Technology is a hot commodity, and if you want to sell your business, particularly in Nashville and other hot markets, you have to have it and use it if you want top dollar. Speaking of selling, it is vital that business owners know about the digital marketplace. This is essentially a collection of online platforms that serve as a matching service between buyers and sellers.

Q: Can you give an example of a digital marketplace?

Beacon Exit Advisors: A few of the most popular are BizBuySell, BizQuest, and Business Broker Network. Many Nashville businesses have gone through these and similar M&A marketplaces.

Q: What else should business owners know about selling a business?

Beacon Exit Advisors: Sellers should understand that there is not a single way to determine how long it will take to sell and how much they can get out of their assets. However, using a knowledgeable business broker can take much of the pain out of the process. When looking for a firm, make sure to ask about their experience in your specific industry. If you are in one of those niche marketplaces, such as law or finance, you will want someone who knows the ins, outs, and subtle nuances on your side.

Beacon Exit Advisors of Nashville is a business brokerage with more than two decades of experience helping entrepreneurs buy and sell their dreams. Visit their website at www.beaconexit.com for more information.