The decision to sell your business is never an easy one. But when it’s finally made it, you’ve got plenty of work cut out for you. Look at the sale as an opportunity to achieve new heights and set new goals.
The success of the sale depends on how well you prepare for it. Knowing what to polish, where to search, and whom to hire can turn the process from tedious to exciting. Selling a company is not as challenging as you may think. Below tips can help you get through the sale faster while achieving the best results.
1. You Can’t Do It Alone
Even if you have created this company from scratch without too much help, you probably know that delegating responsibilities is the key to success. The same is with selling a business. Trying to do it alone is never cheaper or easier. You need the help of an expert.
Hiring a business broker is something the majority of business owners do when the time for sale comes. These specialists take care of evaluating the company, searching for potential customers, monitoring the market, offering advice during negotiations, preparing necessary documents, and much more.
Meanwhile, you should enlist the help of your accountants or independent financial experts. They can help evaluate the current condition of your finances and give you tips on what you can do to fix problems quickly to make the company appear attractive.
2. You Shouldn’t Talk about the Sale
No matter what the reason is for selling a company, you have to keep it quiet for as long as possible. Once the word gets out, your business may start losing value quickly. People don’t enjoy changes since they often bring unexpected results.
Your staff may be leaving the “sinking ship” in order not to end fired by the new owner. Meanwhile, your clients are likely to search for other options since an owner change usually means uncertainty.
As a result, you can start losing revenue and end up selling an unappealing company without valuable employees. Of course, you would need to share the information with some of your staff, especially the financial and legal departments. Ask them to sign a non-disclosure agreement.
3. You Must Set a Realistic Price
Everyone wants to sell a company quickly while getting the highest amount possible. However, the real price of your business doesn’t depend on your wishes. You can figure it out by evaluating the real worth of the company and comparing it to the average offers on the market. Such an evaluation is tougher than it sounds and requires plenty of research and contemplation.
Only a realistic price can help you finalize a deal quickly. Companies with high price tags stay on the market for years. A figure, which is too low, can make a buyer suspicious and force deeper digging, which may not be something you want.
Don’t try to evaluate the business on your own since you have a subjective opinion. Rely on the expertise of professionals, such as business brokers. Remember that the buyer will try to negotiate the price. Be ready to reduce it slightly if you want to sell quickly.
4. You Have to Polish the Company
Before you put the business up for sale, make sure it looks as squeaky-clean and appealing as possible. You would wash windows, mow the lawn, and fix the roof before selling a home. Do the same for your company.
First of all, get all your financial and legal documents in order. According to a Business Broker Cress V. Diglio, a potential buyer is highly likely to check your taxes and contracts. Make sure all of the above is well organized. You need to prepare taxes and financial records for the past three years. Also, have the cash flow report ready.
Take care of the property as well. If you are selling a shop, it must look stellar when the potential buyer comes to visit. The building must be taken care of: walls painted, windows washed, parking lot paved. These little things may not be too costly to polish. Meanwhile, they can increase the value of your business substantially.
5. You Should Separate Personal Expenses
Business owners tend to run personal expenses through their companies. Whether you are only doing it occasionally or it has become an integral part of the way you do business, it’s time to separate.
Before putting the company up for sale, you must sever all personal expenses from business expenses. The buyer should get a clear picture of the revenue, expenses, and net profits. It’s impossible to do with your personal matters involved.
6. You May Have to Wait
Selling a company is much tougher than selling transport or property. It may take months or even years to finalize the deal. When you put your business up for sale, you must be ready to wait. Settling for the first offer may be appealing, but if it’s much lower than you were hoping for, don’t rush.
Allow your company to stay on the market for a while. If you’ve set a realistic price, you can be sure that the right buyer comes eventually. A business can rarely be sold faster than in three months. You must be ready for the process to take up to one year.
7. You Must be Enthusiastic
Be enthusiastic about your company’s prospects. When speaking with potential buyers, you have to show utter enthusiasm in what the business can achieve in the future.
Being sullen and frustrated with the sale is unlikely to bring you a good deal. But if you can get the buyer excited about prospects, you are likely to get a great deal.
Selling a company is a long and complicated process. You can make it easier on yourself by hiring assistants, prepping the business properly, setting a realistic price, and having the right expectations. Take advantage of the above tips to optimize the sale and get the best results.