The evolution of your business can lead to circumstances where you need to sell. Maybe the market has changed, or it is time for you to step back from some daily responsibilities. Whatever the reason you are selling, certain factors will help speed up and maximize selling your business. To really understand how to prepare your business for sale check out the tips below!
12 Considerations When Selling Your Business
1) Paint Your Business’s Future – The vital elements of a marketing plan (e.g., mission statement, collateral materials) should be prepared before deciding on a price. Don’t think about what amount would offer interested buyers an opportunity to purchase a passive income stream in its present state—plan where this company could go if left in capable hands.
2) Involve Friends and Customers – If your buyer has any connections with current customers/suppliers or if you have a customer list, now is the time to reach out and let them know that you are selling.
3) Make Sure You Have an Offering – Many businesses fail when they plan to sell before having an offering in place. If you want to be able to sell quickly, be prepared with ample market research, competitive analysis (i.e., pricing, quality of product or service), as well as a strategic business plan to show potential buyers that they can succeed.
4) Visualize Your Next Steps – What is your goal for the business you are trying to sell? Is it for someone to take over its day-to-day operations, is it for an investor looking for passive income, or is it for a business owner who wants to expand their operations/industry? These are essential questions to ask yourself and potential buyers because they can change the price point.
5) Prepare Your Business’s Books – One of the first steps you should take before listing your business on different sites (e.g., Craigslist) is an accurate balance sheet. This record can be complex if you are selling a recent start-up, but almost every business out there will have at least annual (or a few quarterlies) financial statements available for review.
6) Have You Valued the Business Yourself? – Have you tried to value your own business using websites online? You will likely find that people who have not owned a business before don’t appreciate all the hard work and effort that has gone into it.
7) Sell Your Assets – Many entrepreneurs are uncomfortable selling their company’s assets because they incorrectly assume that you can’t get them back once you sell the assets. This assumption is NOT valid. If the buyer does not want the assets, you can usually find another buyer who will purchase them for different business use. It is essential to determine what your company’s assets are worth and get some feedback from potential buyers before deciding whether to sell all of your company’s assets.
8) Educate Potential Buyers – Selling a business is not like selling a car, where the buyer can drive it away. Business Excess can help you find serious buyers about purchasing your company and have the financing in place to make them qualified buyers. Prospective buyers should be made aware of these differences before they ask for financials.
9) Marketing Is Everything – Do not underestimate the power of marketing. It might feel more natural to talk finances first, but it’s essential to understand that most buyers will have no interest in your business unless they can fall in love with it. If you want to get the best price for your business and eliminate insufficient offers, this is a crucial step.
10) Consider a Business Broker – Finding an experienced business broker can help eliminate the hassle and stress of selling your business. Some brokers will give you advice and feedback on your finances, while others might tell you whether they think you should be selling at all. Brokers are professionals who will help you plan the most profitable exit and be there every step of the way.
11) Don’t Be Afraid to Let Your Business Go – If a buyer doesn’t feel an emotional connection with your business, they will not offer you top dollar. For example, one entrepreneur we were working with had been looking to sell his company because it no longer fit his lifestyle. He was open about this to potential buyers. He wisely decided not to disclose the total number of online leads he had received because it would not increase the buyer’s price for his business.
12) Know Your Limits – Business selling is hard work, but don’t be afraid to ask for help if you are overwhelmed with the process. Sunbelt Business Brokers will guide you from start to finish, so you won’t need to feel overwhelmed.
If you’re looking to sell your business, you must prepare yourself for the process. The selling process starts with knowing what assets are worth and not being afraid to let go of something if a buyer doesn’t feel an emotional connection. You’ll also want to make sure potential buyers understand how different selling a company is from other types of transactions which involve vehicles or real estate. If this all sounds overwhelming, we’d be happy to help!
Our business broker experts would love the opportunity to work with you to create a stellar marketing plan that will generate leads and help you sell your business successfully.