Selling a company or business is not a one-way ticket to Neverland, with less worries. On the contrary, you will have a lot to consider and a lot to put in place. It is a guarantee of more stress for some time.
Moreover, selling a company is not simple. You would want to sell for a great price or at the very least, a good price; plus you would want to ensure that the business you started, all the hard work will be duly rewarded, appreciated or carried on.
Thus, before taking the giant leap to sell your company or business, take a look at a few things to have in mind.
#1. Preparing your business for sale
Selling will require that your accounts and records are up-to-date and ready for presentation to any and every prospective buyer. Thus ensure that the accounts are accurate in order to get the best price for your business or company. Preparation for sale should care at least a year or more before the D-Day.
Before selling out, you have to be sure of the timing. Most business owners only sell as a last resort, when everything else has gone downhill. This is the worst timing to tell, according to Debbie Allen who says “You want to sell when you are at the top of your game – peaked out… Some will say, ‘I’m making good money now. Why should I sell?’ That’s thinking like a business owner, not an entrepreneur.”
Hence, the best time to sell out is when things are at their peak. Then, you’ll have a lot of great offers and competition to acquire your business.
#3. Set goals
It is not just important that you are making a sale. It is vital that you set goals for the sale. What do you expect to get from the sale? What is your end result that you have in mind?
If you lack any view or vision for the sale, chances are that you will come short. You will probably choose the wrong buyer and suffer a loss as a result.
Therefore, take your time to determine what you really want from the sale. Your expectations are similarly important to that of the sell-out.
#4. Test the market
At some point you would have to put your business out there. Get ready to make calls to potential buyers and have people come inspect your business surrounding. Be sure to have a standard and ensure that your potential offers meet those standards.
Monitor what is going on in the industry, the trends and more. This will give you an advantage when thinking of making a deal.
#5. Acknowledge your strengths and weaknesses
Now is the time to be straightforward. What are your company’s strengths? Where are you excelling, and what needs serious improvement? Also, consider the strength of your brand and your management team. Has your leadership sustained profitability and growth even during difficult times?
#6. Perform a business valuation
A business valuation will help evince how much your company is worth, whether it is ready to be placed on the market or not. Ensure that the business valuation deals with:
- The book value of the company and financial condition of the business
- The company’s earning capacity
- The history of the business
- The market price of stocks for other similar businesses
This will help determine whether your business is on the upswing or otherwise.
As previously mentioned, be honest and transparent with your records and accounts. It will severely jeopardize your sale if a potential buyer should discover something that should have been made known but was however hidden.
Experienced investors understand that every business is going to have positives and negatives. There is no such thing as a perfect business.
Honesty is the best policy in all business transactions and selling any business is no different.
#8. Be prepared for questions
Selling yourself will lead to a lot of questions and you need to be prepared to answer them all, despite how simple they may sound.
Never judge a buyer. You never know whom you are dealing with or the buying power they possess. Someone asking what appears to be a simple question could potentially be a buyer that is new to the specific industry and have deep pockets for investing.
#9. Survival of the business
One question that should plague your mind is how successful or otherwise that your business will be with your absence. Since you’ll be selling your business or company, it means that it will be having new owners.
Will the profit and revenue of the company be static, better or worse? Ensure that you have this part covered before selling.
#10. Plan the after-sale
Life will be different after the sale. You will no longer be the owner or head of the company you intend to sell. Thus, make sure that you have life planned afterwards to avoid feeling regrets or going back on your decision.
Hopefully these few tips would help in making the decision you need to make.