There are different reasons why you might decide to put your business on sale. Perhaps, you’ve led the company to great success and want to explore new ventures. Or, the business landscape has changed and you find it necessary to exit your investment. Maybe, you’re among the baby boomers and have decided to retire and pass on the company to the younger generation. Some have just gotten bored doing the same stuff every day.
Regardless of your motivation for selling your business, the process is all the same – and it can be daunting. To help you ensure successful business sales, here are six tips to follow.
Prepare for The Sale
Whether you’re planning to sell your business now or in the near future, the most important thing to do is to plan as early as possible. The US Small Business Administration has compiled useful resources to help you prepare.
Sound planning ensures that all bases are covered – business structure, financial records, and customer base. Improving these aspects will help you sell the business faster and ensure a smooth transition. On the other hand, selling without proper preparation is like walking blindfolded – and many things can go wrong.
Assemble The Right Team
For many business owners, selling a business can be an entirely new experience. As such, you need to build a team of experts who will guide you through the process. Ideally, your team should include an accountant, a lawyer, and a business broker – all of whom you fully trust and are confident of.
Each professional in the team plays a crucial role. The accountant ensures that all financial aspects are covered. The lawyer ensures that you are protected with a strong contract while the business broker negotiates to get the best deal. With this team, you can get the most out of your business.
Confidentiality is crucial when it comes to business sales. When customers, employees or suppliers learn about an impending sale, they might think that there are problems. This can lead to potential disruptions in the operations. To avoid this, you need to keep discreet until the transition comes.
An Orlando business lawyer emphasized the importance of keeping business information confidential. Make sure potential buyers sign a non-disclosure agreement before releasing any company data. As much as possible, only release information if they are a sure buyer. It’s possible that competitors are only posing as an interested buyer, but are only digging for information.
Wait for The Right Deal
Don’t expect to find a good buyer as soon as you post your business. It might take several months or even years to get your desired price – or close to it. Take your time. Don’t rush the sale. In business sales, patience is the key.
However, this does not mean that you’ll get the price you’re asking for. Many business owners set an unrealistic number and end up frustrated. If you get a lower offer, don’t be disheartened. You can politely decline the offer and wait for another buyer.
Keep emotions aside and be rational when it comes to pricing. Better yet, ask for an expert opinion so you can have a realistic valuation of your business.
If you know of trusted colleagues or friends who have previously sold a business, they could give you valuable insights into the selling process. Find out what things were most important to their buyers. Ask about what mistakes they might have committed and that you should avoid them.
Their firsthand experiences and practical lessons are extremely useful. In fact, you can learn more from them than from reading books or online. They might even give you leads or connections that could help you land better deals.
Understand Your Buyer
Selling a business is just like selling any product or service. You do not only focus on how amazing your product is but also want to understand your target buyer’s motivation. You need to know what business buyers are looking for when they check a business. Pay attention to their needs and be ready to answer them.
Keep your sales pitch simple but comprehensive. Buyers don’t want an overly complicated pitch. You don’t want to make yourself look knowledgeable. Your goal is to get their attention towards your business – and not yourself. If you can let them see the value and profitability of your business in five minutes, you’re doing it right. Catch their interest so that you can ask for the right valuation.
Let your buyers know about your business story. Buyers are not only interested in financials. They want to know deeper about your business; things such as why you started the business, what problems you wanted to solve, and how the business has changed your life, your employees, and customers. As trivial as they may be, these background stories are what makes your business special – and it might just be what a potential buyer is looking for.