If you plan to sell your business, give yourself a reasonable timeframe to bring your business into full market readiness.
Set targets to improve performance and minimise risk.
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- Financial: go beyond asking do the numbers add up. Where do revenues, costs and profit need to be to present the best buyer opportunity?
- Strategic: potential buyers look for a compelling business model, sound management systems, streamlined processes.
- Human: be upfront with your team. Work through potential HR issues before taking the business to market.
- Assets: ensure all equipment is well-maintained, premises are clean and well-organised, and all assets are in good order. Potential buyers will be turned off by the need for any urgent major upgrade.
- Risk: assess the risks to your business and work to minimise them. Does the business depend on a single key client or supplier? Can you attract other clients or alternative suppliers? Or can you secure that key client or supplier with suitable contracts? Ensure your systems comply fully with all legislative requirements (such as health and safety) and all staff are fully trained on all systems.
- Legal: settle any court cases or disputes looming over the business before you go to market. Look at the ownership of all the business’ assets – do you or the business have complete (and documented) ownership over them all? Does the business have any intellectual property assets which give the business competitive edge? If so, make sure they’re trademarked and patented.
Call us to help you with the detail.
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- Pay your bills on time – paying your bills and debts punctually demonstrates that you’re reliable and improves your creditworthiness in the eyes of lenders and creditors.
- Don’t use all your credit – keeping your credit utilisation low (ideally 30% or below) showcases that you’re responsible with your business finances.
- Don’t use multiple credits lines – taking out multiple credit cards and loans can be a red flag for credit agencies and lenders and could underline your credit score
- Monitor and correct errors – if you spot any inaccuracies (like incorrect industry SIC or ANZSIC codes), rectify these as quickly as possible to improve your overall credit score.
- Maintain long-standing credit relationships – having a longer credit history often demonstrates stability and can help to boost your overall business credit score.
How can our firm help you with your business credit score?
Being proactive about improving your business credit score has multiple benefits. Lenders will be more willing to fund your growth, potential suppliers will be more willing to offer trade credit and your bank will be able to see your financial stability and offer better overdrafts etc.
As your adviser, we’ll be happy to review your current credit report and help you find straightforward ways to enhance your existing business credit score.
The following content was originally published by BOMA. We have updated some of this article for our readers.