When you have spent years of your professional life building and growing your business into a successful enterprise, it can feel like a large decision to sell.
Therefore, it shouldn’t be taken lightly and needs a lot of thought and preparation from as early on as possible.
So, here are some things to consider if you want to stay in control of the process and get a good return on all those years of hard work.
The time often arrives when your life circumstances change, but that doesn’t mean that the process should be rushed.
Generally speaking, you will need to make up your mind sometime before you need to exit; someone who’s desperate to sell is someone who must compromise on price to achieve a quick sale.
If your mind is made up, make the time to explore market trends to become better equipped to sell when the market is approaching its peak.
Taking your time also gives you the chance to get your business premises and/or land in great shape to command a good price.
Break down the preparation process into some simple steps and ask yourself the following questions:
- Are you dispensable to the business?
If you have key staff who manage the business, you can readily convince buyers that the value truly lies in the enterprise. However, if you’re still tied up in the daily running of things, many would-be purchasers will fear that any real value in the business will disappear once you walk away.
- Are your books and records in order?
Your paperwork will prove your business is profitable. You will need records of at least the last three years’ trading to show the business’s history and how your income pattern is spread across the seasons.
- Does your business stand out from the crowd?
What are the key features which define your business? If you can’t think of any, why should anyone buy your business over others? Giving yourself time to create a unique selling point will also increase the value of your business.
See also: Does my business need a USP?
- Are you free to sell without needing consent from a third party?
Are there binding agreements to share land or equipment which are vital to your business? That could make things tricky when you come to sell, and you will need time and legal advice to sort out the best solution so that you can exit the business.
If you have answered yes to all of the above, you are on the right path to go about selling.
Choose a professional valuer who knows your line of business. This way you’ll know your business valuation will be accurate according to the preferred method for your industry – which will be very important at sale time and the starting point for negotiations.
It’s true that due diligence is usually performed by the purchaser’s team before negotiating a final price. But experts advise you to explore due diligence too. That way, you’ll learn any flaws in your business long before a potential buyer confronts you with them.
As a result, you can resolve problems and avoid giving any buyer the upper hand – which will put you in a much better position to negotiate a good deal.
The art of negotiation is all about your relationship with the buyer. Being personable, honest, flexible and confident will go a long way towards putting you in control of the process and will make for a smooth transaction.
So, there’s a lot more involved than simply slapping a ‘for sale’ sign at your gate. Nevertheless, if you give selling the same kind of attention you have given building your business; you’ll have every reason to earn a profitable outcome.