No doubt selling your business is one of the most complex and important decisions you’ll ever make. Your business likely represents decades, or even a lifetime, of dedicated work. Here, we examine some key steps you should take when it comes time to sell.
One of the most important steps is to begin the sales process well in advance of the date that you plan to put the business on the market. Working with an experienced business broker or M&A advisor is one of the best ways to ensure that you’ll be ready to sell your business when the time comes. It will also help you to avoid the numerous pitfalls that await.
A good brokerage professional can also help identify weaknesses in your business and help you address those issues. Your broker can help you with everything from strategy and negotiations, maintaining confidentiality and establishing the market value of your business, to connecting you with other seasoned professionals, such as accountants and lawyers.
Be flexible. It is vital that you remain flexible in your approach to selling their business and also remain respectful of prospective buyers. Put yourself in the shoes of your buyer and try to think of what they will need to feel confident in their decision.
Consider your own psychological needs. You should not attempt to rush or force a sale or overprice your business. In short, keep “your head in the game” and as much as possible, keep your emotions out of the process.
Sellers should know that the statistics strongly indicate that at least some seller financing is likely needed. Only 75% of sellers ultimately receive their asking price, and businesses that are listed as “all cash” generally don’t sell. Reasonable sales terms will greatly increase the chances of successfully selling a business. Being willing to offer financing makes a clear statement to a prospective buyer that you believe in the business and its ability to generate revenue. From a buyer’s perspective an “all cash” demand can be a red flag.
An open mind and steady temperament will increase your chances of selling. Be prepared for a transition period before you can fully move on to new things. The reality of selling a business is such that “walking away” may not be feasible. Transitioning your business to a new owner is usually more of an ongoing process than a “sign on the dotted line and receive a check” type of situation. Understanding this fact, and working closely with a business broker or M&A advisor in advance of selling your business, will help to streamline the sales process and greatly improve your chances of a successful outcome.
Copyright: BBP, Inc and NEBP
insta_photos/BigStock.com