There are many reasons to sell your business including everything from massive success through to health issues. The key is to be as prepared as possible in order to achieve the maximum return. The farther ahead you plan and the more informed you are about the sales process and realistic value for your business, the better chance you have of selling at a price you are happy about or at least can live with.
Here are some tips for selling your business.
1. Establish a reasonable expectation of the value of your business. While you may have spent years and years nurturing your baby, a buyer may not necessarily have the same emotional attachment it. Be realistic and educated in your valuation.
2. Have a team of Experts to Guide you. A professional accountant will help you determine a value for the business and be a sounding board for any offers that may come in and good tax advise. A lawyer will help with the legal side of the transaction.
3. It’s Business As Usual. Continue to run the business like you have no intention of selling. Don’t take your eye off the ball and allow daily tasks, costs and customer relationships to suffer. A buyer wants to see a healthy, consistent business. A decline in sales will be a red flag to a buyer.
4. Ensure Confidentiality. Have a non-disclosure agreement ready to be signed by all parties. Only those close to the deal should have any information about the sale. Should a deal not close you don’t want to risk your staff or customers finding out and getting nervous about the future.
5. Knowledge is King. Prepare for the sale well in advance. Accurate, up-to-date accountant is a must. A fresh coat of paint of a good house cleaning will increase interest and perceived value.
6. Think Like a Buyer. Anticipate any information the buyer might request and have it ready.
7. Competing Bidders May Mean a Higher Sale Price. If two people want the same valuable item the price might increase. This may require a third party to act as an intermediary.
8. Be Flexible. Be open to considering all options. An all cash transaction sounds great but will it kill the deal if a buyer is completely against it. Would a vendor take back be a workable option. Are there tax benefits or implications. Keep an open mind and make good use of Experts to Guide You.
9. Keep the Deal Moving Forward. Momentum is important. Be timely in your responses. Prepare requested items quickly. Stay on a schedule.
10. Be Willing to Stay Involved. A smooth transition will have tremendous value to a buyer. Would you be willing to stay on for a negotiated period to assist with the transition?
Will you organize introductions to key customers? Employees may be vital to the continuing success of the business. Have a tactical plan to ensure employees are well informed after the deal has closed.