7 Things To Keep In Mind When Selling Your Business – Ultimate Guide
[This article was written by Maria MacAraig.]
Are you ready to embark on an exciting journey?
Excitement is hardly something you expect to experience when it comes to selling a business, is it? Meanwhile, regardless of your reasons for saying goodbye to a company, the process doesn’t have to be tough, terrifying or frustrating.
Selling a business can be a fruitful experience, bringing you new knowledge, skills, and connections. All you have to do is take the right approach. In this article, we’ll talk about things to keep in mind while selling your company. They can help you achieve unexpected results.
1. Planning is Everything
Even if you need to sell a business fast, you have enough time for planning. Remember, selling a company is not a quick process. For some businesses, it may take years. So a week or two doesn’t make that much of a difference.
Take the time to create a timeline for the sale. Make a checklist of things to be done to make your business ready and more appealing to potential customers. Enlist the assistance of the right people and coordinate the sale with the current needs of your company.
2. You Have to Enlist Help
Selling a business without assistance is virtually impossible. You’ll need to ask for help many times throughout the process. Start with accountants and legal advisors. Ideally, they shouldn’t be employees of your company. But in some cases, you have to settle for what you have.
These specialists should get your financial and legal business in order. So it has a polished look for potential buyers. When buyers dig a little deeper to find out about your financial situation, don’t allow them to discover anything questionable.
Whomever you ask for help, make sure they sign a non-disclosure agreement.
3. Remember To Keep Quiet
It’s important to be quiet about the upcoming sale. According to an Orlando based business broker, the fewer people know about it, the more chances you have of selling your company quickly.
If your employees find out about the sale, they could start leaving the company. In many cases, people don’t want to stay on board when they don’t know where the ship is going.
Meanwhile, your clients are likely to look for other options. Who wants to work with the company that has an undetermined future?
All of the above can lead to lost revenue, poor reputation, and eventually, a lower price tag.
4. Hire a Business Broker
No one wants to give up 10% to 15% of their money to someone. However, when you are selling a business, hiring a business broker usually has a high ROI. Selling a company is much more complicated than selling anything else. It requires extensive expertise, smart connections, plenty of research, and much more. Do you have all that?
If not, consider hiring a business broker. This specialist is responsible for evaluating your business, pointing out things to fix, finding buyers, assisting during negotiations, and much more.
Take your time searching for the best business broker in your area. This choice could make or break the sale.
5. Enhance the Value of Your Business
Before you start evaluating your business, you can do a few things to increase its value. You can take advantage of the business broker’s recommendations or get assistance from other advisors to figure out what can be done to improve the company’s performance within several months. Work with board members to ensure all efforts are taken to improve the value.
It could involve streamlining processes, reducing expenses, paying off debts, and much more. It’s always possible to find a few quick-fixes to make your company more appealing. You should continue doing the above even when the business is already up for sale.
6. Evaluate Your Business
Setting the right price for your company is a huge step toward a good deal. The cost depends on numerous factors, including discounted cash flow, capitalization of earnings, asset-based valuations, and market-based valuation.
Before evaluating your company, get all the financial documents in order and polish the business as much as you can.
There are two ways to evaluate your business:
- Do it yourself – to achieve that, you have to do substantial research and enlist the assistance of your financial advisors.
- Hire a business broker – this is usually the best course of action if you are pressed for time. Meanwhile, a broker knows the market and studies the demand for businesses like yours. This makes the evaluation much more accurate.
7. Tell A Story
When potential buyers evaluate a company, they expect to find all documents and records in proper order. Any disorganization in materials can delay the process and push buyers away even if the deal is appealing.
Don’t try to save money on preparations for the sale. Create a nice-looking package that tells a good story of your business and shows the potential buyer the benefits of acquiring it. Orderly documentation increases buyers’ confidence and level of comfort, thus helping you negotiate the best deal.
Selling a business requires formidable preparations, extensive expertise, and plenty of patience. Don’t hesitate to invest time and money in making your company more appealing to the buyer. Enlist the help of as many specialists as possible, including a business broker, to ensure the speed and quality of the sale. Listen to your gut feeling when finalizing the deal. Good luck!
Maria has been writing articles for 5 years. She specializes in business and marketing. On her free time she loves to read and write about her travel experiences. You can find her doing this by the beach.