Selling a business is a significant decision that requires meticulous planning and preparation. You may have been planning your exit for years or very quickly decided that you want or need to explore the sale of your business. Either way, there are crucial steps that you need to take if you’re going to first and foremost attract a buyer and then make sure that you’re in a position to negotiate the most lucrative transaction you can whilst securing agreement to the terms of sale that you want.
Here we’re going to look at how to navigate the process of preparing a business for sale so that you can get the best outcome.
Determine your reasons for selling and evaluate the ideal timing. Consider market conditions, business performance, personal circumstances, and your readiness to transition out of the business and what life after sale looks like for you..
Potential investors/buyers will always want to understand the current state of play and how the financial position of the company has changed over the past three to five years.
Get ready to be able to present income statements, balance sheets, company accounts, tax returns, cash flow statements, and any pending or recurring expenses. Developing a weekly management report of key performance indicators is also a key step.
Engage a professional business appraiser or consultant to conduct a valuation. Understand the true, present value of your business as early as you can. Seek the assistance of a professional who can not only provide a current valuation, but who can assist you with the rest of the process from here. A professional business broker will work with you to understand your current position and your objectives. They will be able to help you create a complete plan to get you from where you are now to where you want to be when it comes to completing the sale.
Make your business as profitable and efficient as you can. Look to pay off any outstanding debts, streamline operations, and resolve any legal or compliance issues to present a clean, uncomplicated financial picture to potential buyers.
Refresh your ‘front of house.’ Does your branding, marketing materials or premises need a facelift? It’s important to make sure that how you present the entire business is in line with what potential investors will expect and your strategic plans.
It may be that you’re thinking ahead of time and planning to sell in three to five years. This gives you an opportunity to prepare perfectly. Redefine your image, create new marketing and sales campaigns to facilitate growth, and freshen up the entire operation. Get all the necessary foundations in place so that a new owner can just hit the ground running. Do everything you can to maximise your business’ value and all-round appeal to potential buyers.
Document standard operating procedures, key processes, systems, and anything else that you need to showcase how your business operates day-to-day. A potential buyer will want to see a smooth, seamless operation at work.
Intellectual property can be a huge factor when it comes to building your value too. Organise all the paperwork you have relating to IP rights, trademarks, patents, copyrights and any other protections you have in place that could lead to future realised value for a buyer.
If you haven’t already been working with an advisor since your initial valuation, now is the time to get your team together to manage the sale and get you the best deal!
You will want an experienced business broker in your area to get involved at this point. Depending on the size and type of your organisation, you may also need them to work closely with your accountant and any relevant legal professionals.
Your business broker will:
At Business Partnership we can provide you with a free valuation today.
There’s never any obligation and it’s always confidential. Find out what we could achieve for you and how we can help you every step of the way.
Call our team on 01606 535 024 or find your local contact here.
Establishing an exit plan early in the life of your business is crucial if you are to extract the highest value from your investment of time and money. At Business Partnership, we believe a good exit plan will allow entrepreneurs to secure a high return on sales, whether the business is meant to provide an income until retirement, or you intend to sell your company sooner rather than later.
Most business owners do not understand the real value of an exit strategy and will often wait until something happens, or they want to sell their company before creating a plan. However, an exit plan is invaluable if you want to be in control of your future and extract the highest amount of money from your business’s sale. So, here are the top ten reasons why you should start working on that exit strategy sooner rather than later to eliminate any risks to your business.
Having an exit strategy in place will allow you to plan for your business’s future, help establish your goals, and create strategies for achieving them. For example, it will enable you to be in control of hiring the person who will come in and take over from you. You also have the foresight to know when to hire full-time employees or seek out freelancers.
Put yourself in a buyer’s position for a minute. You never bid higher than the estimated price of something unless you have to. As a seller, having an exit strategy will help you evaluate whether the presented proposal is good enough for your business.
An exit plan will help you gauge what your business is actually worth. Not the back-of-the-envelope guesstimate, but what you could potentially receive if you decided to sell. It will give you a thorough evaluation of your company’s financial position, intangible assets, potential buyers, and the respective market conditions will help you determine the value of your business.
The perfect time to sell is typically when your business is doing well; the financials are trending upwards, sales are booming, the team is strong and demand is high. However, with the current economic uncertainty, this is hard to predict. An exit strategy will help you identify a time to sell your business. With a definite period of operation in mind, you will be able to focus on developing the business and preparing it for sale.
Having an exit strategy is a sign of fiscal foresight and responsibility that makes your business more attractive to potential buyers. It shows you have set clear visions and goals for your company and you have dedicated your time and resources to ensure you achieve those goals. An exit plan also tells buyers that you are committed to selling the business and will not change your mind during transactions.
When you run a business, it is often your world, and it can be hard to let go of something you created. Therefore, it is understandable if you are having second thoughts about leaving. However, an exit strategy will help you prepare for departure by reminding you that you have achieved everything you set out to do.
Whilst we are currently in a buyer’s market due to the knock-on effects of the pandemic, an exit plan will help you pivot and adjust when you sell your company to achieve the best results. When the time comes, you will be well placed to exploit a strong seller’s market and receive the maximum offer for your business.
Exiting your business can be tedious, time-consuming, and expensive, as all the paperwork must be done from scratch. However, with a good exit plan, you will have completed all the proper documents and prepared yourself for the admin required to sell your business.
Your exit plan should consist of how much your business is worth and reasons why it is and will continue to be profitable. With this information present, you can negotiate and convince the buyers that they will yield high returns from your small business.
Whether you are leaving your business to start a new venture or looking to retire, the whole point of preparing for your exit is to give you the time to plan for life after the sale. Having an exit strategy in place will allow you the best opportunity to exit your business with the maximum value. So, think of an exit strategy as a blueprint for your future. With it, you can set goals for your business and plan ways to achieve them.
If you’d like to talk to someone about your exit strategy, call 01606 535 024 or find your local office.
Selling your business could be one of the biggest changes that will ever happen in your life, especially if it’s a family business or a company that you built from the ground up. After all, if moving to a new house is in the top 5 most stressful experiences of a person’s life, then you can only imagine where selling your business ranks.
Yes, this is personal to you and your family! Do you know that 75% of business owners regret their exit one year after leaving? (The 2013 State Of Owner Readiness, The Exit Planning Institute) Why is this? The answer to this is largely due to owners neglecting their emotional preparedness to exit.
It’s therefore incredibly important not to underestimate the emotional impact that this sale could have on you and the people around you.
Business owners can go through all kinds of emotions when they are selling up. How you feel could depend on your reasons for selling and how well the sales process goes as well as on your personality. Some people cope with change well or are excited about their plans for the future, but others can find the process unsettling or upsetting. Your feelings could also change at different stages of the process.
Some common emotions that you might experience along the way include:
It’s not surprising that selling a business can be so emotional, because business owners have put in so much time, effort, and energy, often over many years. The people around you, including your family, employees, and even your customers, will also have an attachment to the business, so they could be going through a lot of the same emotions.
Recognising the fact that selling your business can bring up strong emotions is one of the biggest steps you can take towards managing the impact. Ignoring your feelings or dismissing them as unimportant can make you feel worse. You should give yourself some time to think about your feelings before, during, and after the sale. You might find it helpful to talk things through with someone you trust, whether that is a friend or the broker who is managing the sale. Making plans for the future can also help you to adjust to this big change in your life and give you something to look forwards to.
It’s also important to acknowledge the feelings of those around you. Failing to address any negative emotions could lead to them building up and breaking out at the wrong moment, potentially disrupting the sale. You need to, at the right time, get your family and employees on board to ensure they’re ready to welcome the new owner. You can help by providing a listening ear, keeping people informed, or getting their input on the sales process. You should also be able to rely on your broker when you need to have difficult discussions with employees, family members, or other interested parties. Having an understanding third party on hand to manage these conversations can help keep any strong emotions under control. Finding a way to commemorate everything you have achieved together can also be meaningful. You could show your appreciation by giving employees a memento of your time together or create a book or album to record the history of your family business.
Getting the right support along the way can make all the difference. You won’t feel as anxious about the sales process if you’re being guided by an experienced broker who has been through it all before. You will have someone to talk to if you’re experiencing doubts and you’ll get the expert advice you need to avoid making emotional decisions that wouldn’t be good for you or the business. It’s important to work with a broker who understands how you feel about your business and what you want to achieve through the sale. Your broker should find a buyer who you can trust to take on the business that you have worked so hard to build.
The same care and diligence that you have applied to building your business, should be applied to selecting the right business broker to make the exit journey as smooth and successful as possible.
Contact Iain or your local office if you would like some confidential advice around your business sale.
The way your business is organised may suit your working style now, but some structures can make it harder to hand over to a new owner and can even lose you money on a sale.
You may have a clearly defined organisational structure or you may have one that has developed naturally as the business grew. Either way, if you’re thinking about selling, it’s a good idea to consider how efficiently things work and what shape your business takes.
A hub and spoke business structure places you in the centre, with everyone else reporting directly to you and relying on you to make decisions. As business owner, you are the hub that holds the business together so you probably have a huge workload. In this structure, you will be in constant contact with your employees and clients. You might be the only person who knows how certain things are done.
While this business structure gives you the most control over your business, it also means that nothing can get done without you. It is difficult to step away or enjoy a long holiday. Business growth will also be limited because there is only so much time available each day.
When a buyer comes to look at your business, they will see this as a problem. They may like your business and want to buy it, but their fear will be that sales and customers will not return after you sell up.
In the best case scenario, they will buy your business and you will need to continue working (for them) for a number of years until the risk of losing customers has been effectively managed.
In the worst case scenario, they simply won’t make you an offer for your business, considering that the effort required to change the business structure too great for the rewards.
In a traditional, hierarchical business structure, the person at the top of the tree delegates some of their responsibilities to the next tier of managers, department heads, or senior employees. Each of these will in turn interact with the following tier of employees.
This structure means you don’t have to make all the decisions yourself and you can rely on managers with specialist knowledge. You don’t have to know exactly how everything works as long as you have someone on the team who can take charge of that part of the business. It is necessary that you delegate and train your teams effectively. Abdicating responsibility without training and empowering your team is a recipe for disaster in itself.
A hierarchical business structure can enable more growth as responsibilities are divided between different groups and levels. You can add on new teams as the business changes. You will also be able to focus on the parts of the business that need you most while your team manages the areas they know best.
When a potential buyer looks at your business, they will be able to see you, as business owner, have already passed on the majority of your customer and supplier relationships to your team. The risk of customers leaving or sales dropping as a result of a change of ownership are minimised as a result.
Minimising this risk of reduced sales makes the business more attractive to a buyer. They are more likely to make you an offer and that offer is more likely to be one which is acceptable to you.
A matrix structure is similar to a hierarchical business, but it allows for more flexible links between the different parts. Employees whose roles bridge different departments might report to multiple managers.
The matrix structure also allows for horizontal links between teams or individuals. Rather than having to go through their managers, employees in different groups will be able to work with each other directly.
The matrix business structure is the most efficient and flexible option so it can be ideal for fast-paced sectors and businesses that include a variety of different roles and activities. However, it does put more responsibility in the hands of employees so it is vital that clear procedures are in place to ensure information is shared with everyone who needs it.
The matrix structure is not for everyone. You have to have trust in your team, empower them, and lean from any issues which arise. If a blame culture exists, this structure won’t work.
For investment buyers who are looking to take a strategic role post purchase but not get involved in the day to day running of a business, this structure can be appealing.
The best organisational structure for a business depends on its size and your plans for the future.
Many small businesses begin with a hub and spoke model, with one person making all the decisions and doing most of the work themselves. However, effectively delegating some of these decisions and duties to other people enables growth and allows more flexibility as the business changes.
Moving away from the hub and spoke model can also make your business more saleable. If the business is too dependent on you, it devalues it in the eyes of a buyer.
If you bring your business to market hoping to get top dollar but haven’t done the work to get your structure right, you are giving away value. But trying to implement major changes to your business structure can be difficult and they won’t happen overnight.
Give yourself time to make these changes. Your business value will be higher and your business sale will be smoother if you do. You will also have more engaged employees if you involve them and trust them in your entire business operation.
Under the name of Hub & Spoke, your company structure is one of the 8 key drivers of business value. To find how your business measures up in this and against the other business value drivers, take your own confidential Value Builder Score.
Sometimes the motivation to get something done can result in unexpected benefits. If you own a business you may not be thinking of selling it right now. But what if the measures you took to prepare it for sale actually improved its sellability anyway?
Just as mystery shoppers are used by retailers and service providers to get a clear measure of how they are performing from a customer perspective, so looking at your business from the viewpoint of selling it can open you up to all sorts of ideas of how you might improve how it runs.
Imagine yourself as the prospective buyer of your own business. What would you ask yourself?
It is a case of how you work on your business, not just in it. If it feels like you’ve been sucked into a vortex of over-involvement where you can’t leave your business alone without fear of it going off the rails, then you need to think about how it is structured. More importantly, how does this appear to others? Do they see your business the same way you do?
Benchmarking your business is like having your home valued. It gives you a clear idea of how your business appears from a wider perspective. It also provides essential guidance for how best to prepare your business for sale, and in doing so, how to improve it.
Sometimes sellability isn’t just about selling; it’s about adding intrinsic value.
If you’d like to start a conversation, get in touch with us now.
Selling your business can be a huge change in your life, especially when you’ve been running that business with relatives or if it has been in your family for generations. Selling can be the right move for both your family and the business, but it’s important to consider the impact it will have on everyone.
The biggest difference when selling a family business is the impact that it can have on the relationships within your family. Many people feel strong emotional attachments to their family business, even if they aren’t personally involved in running it.
The ties can be particularly strong for multigenerational businesses. Older generations can feel upset that the legacy they have passed on will be leaving the family, while younger ones may feel guilty about allowing the business to leave the family. It’s important to take these feelings into consideration and to involve the whole family in the decision to sell. Taking some time to talk or finding a way to commemorate the business will help. Try recording your memories or donating some of the proceeds to a charity in the family name.
As well as the emotional implications, it is important to consider the practical and financial impacts on your family. Family members who work for the business may be staying on as employees, looking for new jobs, or considering buying out the business. It’s vital to keep everyone informed so they can make the right decisions about their own futures.
Money is always a sensitive issue but becomes more so when selling a family business. Suddenly, family who don’t work in the business can become very vocal and opinionated on value and deal structure.
Its best to get professional advice on board. A business broker will provide advice on value and deal structure. A solicitor will ensure that the proceeds are divided fairly to prevent future conflicts. So if you’ve not reviewed your articles of association or shareholder agreements recently, it will be worth taking a look.
Selling the family business can trigger conflict, but it can also be the best thing for you and your relatives. Aside from the financial windfall you might expect, selling can also be the right move if keeping the family business has become an obligation rather than a calling.
If the family has changed in its ambitions, interests, or location, then there may not be anyone to carry on the business. Selling up could enable you to take on new challenges, which could actually be more in keeping with your family’s entrepreneurial spirit.
If the business has been in your family for generations then you may be worried how this break with tradition could affect the brand and your family’s legacy. You may also be concerned about your employees and customers, especially if you have built long-lasting relationships with them.
Although its difficult to hand your family business over to someone else, it can be the best choice for the business. If so, a Management Buy Out (MBO) might be an option which is exactly what Excelsior Panelling Systems did.
A growing business might need someone to come in with new skills or capital in order to take it to the next level. You might not have the time or energy to do justice to the family business or might be struggling to change with the times because of the weight of family tradition. Bringing in new blood could reinvigorate the business to higher growth and end up with a smaller piece of a much larger pie.
You shouldn’t let family ties bind you to a business particularly if it’s no longer producing the returns your family needs or if it feels more like a burden than a blessing. If the family business is preventing you from following your own dreams or you feel you’re holding the business back, then get in touch with us to work through the options available to you.
Do you know your Growth Potential? Preparing for a sale or exit from your business might seem like the end but it’s important to realise that for whoever is taking your place, it’s the beginning. Potential buyers aren’t solely concerned with past performance, they need to be assured that there’s a future in your business too.
Naturally, you tend to look at the value of a business based upon historic performance and metrics. Creating a successful business is a proud legacy; it’s an achievement. The way you extrapolate that is through how the business has performed so far.
However, buyers are not buying your past. Whilst the positive and profitable past of a business is undoubtedly a huge factor in the buying process, potential buyers also need to see a scalable future in your business.
They are looking to buy the future stream of profits. If you’re exiting, you’re at the end of your journey; they are only just starting. It’s fresh and new and needs to be scalable enough to demonstrate a viable future.
Knowing your Growth Potential adds value to your business. Importantly, this shows buyers that your involvement in the company hasn’t been focused solely on the immediate performance, but also on the long-term goals.
Allow buyers to see the potential and understand the current position and potential direction of the business. Think about how you’d answer the questions below if a buyer asked;
Be prepared to show your industry knowledge and understanding of the opportunities that exist within your sector and how they impact your business.
In a geographical sense and in terms of capacity. Could you cope with international interest or spikes in demand? Our research has shown that businesses with international reach usually experience higher offers.
In its current position, can your company cope with an increase in demand or would this cause problems? Paul at Uscita notes that; “If a substantial increase in sales represents short-term problems with staff, cash-flow, storage, premises etc, of course a buyer will reduce their offer, to reflect any further investment they have to make. A business with in-built scope for huge increases in demand is much more appealing, especially for a buyer with plans for growth.”
Buyers are looking for scalability when considering an acquisition. High risk businesses, with low growth potential are off putting for those looking to grow and expand once they’ve purchased. Don’t forget, when you are exiting or selling, think like a buyer. Remember how they will calculate the value of your business.
The focus therefore, is on how profitable the business will be moving forward aligned to the risk involved in this future growth, for the buyer. It’s important that you understand the inherent costs in your business and the impact rapid or sustained growth will have on profit margins.
If you are interested in finding out more about your growth potential and how you can create a more scalable business, whilst planning your exit, please contact us today in the strictest of confidence. Call us on 01606 535 024.
The right timing can make all the difference when you’re selling your business. It can ensure that your business is on the market when it has the best chance of selling for a high price. Getting the timing right will also ensure that selling up is the best thing for both you and your business.
After investing so much of your time, money and energy into your business, you will want to ensure that you get the best possible price when you sell. The current market mayhave a big impact on the value of your business so it is important to check it out before selling. You can start by looking at listings and recent sales of similar businesses in your area to get an idea of how much you might get and how long businesses are staying on the market. If businesses are selling quickly then it indicates that there is plenty of demand and there should be buyers out there. If sales are slow or prices are lower than you hoped then you might want to wait a while before selling. Even a few months or a change in the seasons can make a difference to the market, especially during uncertain times.
One of the most obvious risks in selling your business is that you might not get as much as you believe it is worth. Many different factors can affect the value of your business and they can fluctuate over time. When you sell your business, you will be hoping to get the best possible price, but there is a chance that prices could go up after you’ve sold.
However, there is another side to this equation that is also worth considering. The current state of the market or of the wider economy will also affect your plans for the proceeds of the sale. If you’re about to start up or invest in another business, then you might be hoping to get a bargain while prices are low. If you’re planning to retire or invest your money elsewhere, then you’ll be hoping for growth. Waiting too long to sell your business in order to maximise the immediate profits could mean that you risk missing out on these opportunities. You will need to balance these risks depending on your own situation and future plans.
Researching the market for yourself can give you some idea of what to expect, but things are always changing and your business is unique so it isn’t always easy to compare it to others. You can get a more accurate idea of what your business is worth by talking to an expert who is familiar with the local market.
External risks associated with the market aren’t the only ones to think about when selling a business that you’ve put so much time and effort into. You may also be considering the risks to the business itself.
On the one hand, your business is your legacy, something that you’ve helped to create and cultivate into what it is now. Even if you’re ready to sell, you will still want to see it succeed, especially if you have employees and customers who depend on you. Getting the business into the best possible shape before the handover is the best thing you can do to ensure its future success when you find the right buyer, but you will always be taking a risk on them.
Although it can be difficult to pass over everything that you’ve built up to another owner, it can ultimately be better for the business. Business owners need to be ready to take risks in order to grow or adapt to changing times. However, as we build up our businesses and the equity that we hold in them, it can get harder to take these risks, even when they are necessary. This is especially true when you’ve been running the business for a long time, have more family responsibilities, or are nearing retirement and unable to risk your nest egg. We naturally become more risk averse as we get closer to selling. At this point, it can be better for the business to be passed on to a new owner who can take chances to bring the business to the next level.
The current market will determine how much you can get for your business, but it isn’t the only factor to consider when deciding when to sell. For many business owners, the deciding factor will be their own personal circumstances. Maybe you’re thinking about selling because you’re ready to retire or moving on to a new challenge. Getting the timing right for yourself can be just as important as thinking about the current market. Since you’ve put so much into your business, you may also be wondering whether the time is right to pass it on to a new owner. You can’t control the market, but there are a few things you can do to ensure your business is ready to be sold.
The simple truth is however that you can never align all the stars – the strength of the market, your business and when you’re ready. So, all you can do is prepare the business to be ready when you’re ready to sell and doing that right will make it attractive to buyers, thus countering market forces.
Fortunately, at Business Partnership we can help you to gain a deeper understanding of what makes your businesses valuable today and prepare your business to be ready when you are. Just take one of our Value Builder Score or speak to your local partner – just enter your postcode here and we will do the rest?
As your business grows, it’s easy to put off thinking about the day you’ll eventually step away. But with the future always uncertain, it’s essential to prepare for that eventual transition – ensuring your business is not only valuable but attractive to potential buyers.
Much like selling a house, where small improvements can raise the sale price, selling a business requires preparation – but it’s more complex. Unlike a quick property renovation, improving your business’s sale value takes time. Your business is a dynamic asset with multiple stakeholders, and superficial fixes won’t fool experienced buyers. Any glaring weaknesses will be easily spotted.
The good news is that if you’re running your business with a professional approach, you’re already building value, which will pay off when you’re ready to sell. But how can you ensure your business is structured for future saleability? Here are seven key steps.
Accurate, up-to-date financial records are crucial. Buyers need to see a clear and transparent picture of the business’s performance, and they’ll be wary of any discrepancies.
It’s common for business owners to mix personal and business finances, but this creates confusion and potential red flags. Keep your accounts clean, follow recognised accounting standards, and ensure that all adjustments, such as accruals and prepayments, are correctly reflected. A regularly updated balance sheet will help both you and potential buyers understand the true position of the business.
A buyer is investing in the future of your business, not just its present. Having a clear vision and well-defined strategy is a significant selling point.
It takes years to refine a business strategy, but by the time you’re ready to sell, you should have a solid plan in place. A one-page summary outlining your business vision, objectives, and execution strategy will provide potential buyers with confidence that your business is on the right track.
A strong management team is one of the biggest indicators that your business can thrive without you at the helm. It demonstrates continuity and reassures buyers that the business won’t collapse post-sale.
Building a leadership team is a long-term commitment. Choose individuals who not only have the right experience and skills but also align with your company culture and values. It’s equally important to give them the autonomy to lead – their success shows the business isn’t dependent on a single individual (i.e., you).
Having formal, well-structured legal agreements in place is crucial. While some buyers may overlook informal arrangements, most will see them as a lack of professionalism.
Ensure that employment contracts are up to date and that supplier agreements are legally binding and, crucially, transferable. Transferable contracts are evidence of a stable revenue stream and make the transition smoother for any new owner.
A resilient corporate structure is essential for a smooth handover. It shouldn’t rely heavily on any one individual, including key employees, who could leave at any time.
If your business would suffer significantly from the loss of a key person, you need to reduce that risk. Implement systems and processes that allow roles to be transferred with minimal disruption. A strong corporate structure signals to buyers that the business is sustainable in the long term.
Effective risk management demonstrates stability. Buyers understand that no business is without risk, but they’ll want to see how you handle potential threats like outdated stock, bad debts, or legal issues.
Develop and implement risk management strategies, and make sure you can clearly communicate them to potential buyers. Showcasing how you manage risk is just as important as showing your profits.
Ultimately, buyers want to know that your business is profitable. Consistent earnings are a major selling point, and buyers often look at cash flow to gauge this.
While some acquirers rely on balance sheets or profit and loss accounts, many look at earnings before interest, tax, depreciation, and amortisation (EBITDA) for a clearer picture of profitability. A steady EBITDA gives buyers confidence that your business is financially healthy and provides a good basis for negotiations.
Having a clear exit strategy is essential for any business owner. By focusing on these key areas, you’ll not only increase the value of your business but also make it more attractive to potential buyers. And when the time comes to sell, you’ll be in a strong position to negotiate the best possible deal, ensuring a rewarding exit and a secure future.
If you run your business professionally, you are continually building value. This will attract better offers when you put it on the market. So how do you structure your company for a future selling potential?
(originally written Sept 2019. Updated Oct 2024)
Should your staff be wearing a uniform at work? If you’re a health professional, airline operative, in retail, or in banking, wear overalls as a mechanic or engineer, white coats as a chemist, then uniforms are likely to be standard attire.
Reasons for having these uniforms will range from personal protection, to prevent damage to clothing, an effective way of company advertising, practicality within the work environment, prevention of contamination or to be easily identifiable. These are true uniforms.
However, in other professions, primarily office based and client facing, working environments, what are acceptable dress codes? What are the ‘uniforms’ of acceptability that working society places on itself?
A Balancing Act
The main debate surrounding a workplace dress code tends to focus upon the effect the clothes employees wear and how it impacts their productivity.
What are the benefits of introducing a workplace dress code and is there any proof that employees work better when they’re dressed smartly?
All for one
A dress code in the workplace helps to unify your staff. By wearing the same uniform or following the same dress code as one another, each member of staff is placed on a level playing field. I recently watched Hidden Figures (highly recommended film about the role of black, female scientists during the NASA space race with Russia). Part of the film sees the supervisor reeling off a list of appearance requirements or ‘uniform’ to the staff member;
That was the 1960s, during the 1970’s we were first told that a person decides if they like and/or respect you in the first couple of seconds of meeting. As such, everything should be done to convey a professional image; dark suit, white shirt, plain tie, laced up shoes. But times change.
What is the equivalent today for your business?
Studies have shown that, psychologically, what you wear can have a massive effect on how a person will feel and act during the day. By keeping everyone dressed similarly, suddenly everyone is on the same level, meaning each person in the team should be respected equally.
Professionalism
Its difficult to deny the effect of appearance on how we perceive someone. Casual workwear could be viewed as allowing employees to have a relaxed approach to their duties. Uniforms or a smart dress code indicate professionalism and pride in the job at hand. Studies have also shown that dressing to impress gives us a sense of power and positivity. Yet creatives will say the opposite. Those artists, designers, creators might say they feel stifled by a uniform and need to express themselves through their clothing in order to express themselves through their work.
Productivity
If you’ve ever worked in an environment where you wear a uniform or had to dress smartly, you’ll know the feeling of getting home and changing out of your workwear into your comfy clothes for relaxing. In the same way putting on a uniform helps to put your staff into the mindset of “It’s time to work”. Studies have shown the effect that uniforms have on increasing productivity in the workplace. One study showed the impact that our clothes have on performance, by increasing abstract thinking, an important trait for your workforce to adopt.
However, there are counter arguments. After an entire childhood of ill-fitting blazers, itchy school jumpers and making your tie as short as possible, is it any wonder there’s some resistance to dressing smartly in your working life?
Does uniform fit with the ethos of your business? Not all companies have a corporate image and so it’s important to consider whether a uniform or dress code would be out of place with your brand. There is also the possibility of employee resistance.
What the customers think?
An old rule of thumb was always to dress ‘one notch smarter’ than the customers you are likely to meet. That no longer seems to be the case with most companies ditching the tie and, in the case of digital media companies, mostly adopting a jeans and t-shirt approach for day to day, only swapping into a formal shirt for important meetings (but keeping the jeans).
So what if we visit a solicitor? Would you trust the services of a male solicitor who met you wearing shorts in the summer? Would you trust the services of a female solicitor who met you wearing a crop top and showing off a naval piercing?
No matter how much we say we judge people on their abilities over their appearance there is always going to be a gut reaction that happens before logic rushes in. Just like our fight or flight mechanism, judgement seems to be built in. The question then is whether logic can override that gut reaction and are we losing business as a result?
Miss Moneypenny, take a letter – NOT
Bear in mind also, that perceptions change with generations. The ‘Boardroom’ and its members, has largely transitioned from a fusty environment, filled with men in suits, to a more modern, relaxed and inclusive environment; it is now even fashionable to supplant the boardroom for stand up meetings around a table.
So, with these points in mind, will you be making any changes to your workplace dress code? Is it imperative to wear a tie to work? There could be more to the phrase dress for the job you want, not the one you have than we thought…
What do you think?
Whether you’re selling, buying, or planning for the future, Business Partnership is here to help. Contact us today to speak with your local Regional Partner and start your journey toward success.