Are you a business owner at that stage in your life where you are contemplating the potential sale of your company? Undoubtedly you have thought about selling a time or two and truth be told, 100% of all business owners have from time to time. It's perfectly normal to question why, when or how to sell your business. The main key to a successful sale is preparation. Keep in mind that whatever you put into the process is what you will get out of it.
Understanding the selling process and being prepared are the key indicators that will establish the tone of selling your business and help you be more comfortable when you are ready. The selling process is important and requires a huge amount of commitment. Selling your business needs to be a calculated decision based on many actors.
Therefore, when you are ready, recognizing "The 10 Do's of selling your Business" will position your company at the right place and help you understand the ins and outs of the process a bit better.
Do... Ensure it's the right time for you to sell your business and understand the reason behind your motives. While the purposes of selling are typically personal (retirement, ill health, death, divorce and burnout) other significant considerations, such as money, is generally involved as well. Selling your company is perhaps one of the most difficult decisions you will have to make, so just confirm your decision, and stand behind it.
Do...Meet with your team of Trusted Advisors. A meeting with your business broker, exit planner, attorney, accountant, and other crucial team members that will play a huge role in gathering and preparing all necessary documents for your business broker. Your team of trusted advisors also needs time for preparation so they can effectively plan to assist you in the transaction.
Do...Housekeeping and maintain accurate book, records, and financials. Having up-to-date information on your company is not only a good practice, but it also presents your company in a more appealing manner to Buyers. A general rule of thumb is to have a minimum of 3-5 years of tax returns, financial statements, and payroll history as well as detailed fixed asset lists including equipment and vehicles.
Do...Get a business valuation by a credited company/individual to place the proper value on your company. It is very difficult for a business owner to value their own company and obtain a fair and reasonable asking price. Having a third party professional perform a business valuation takes out all bias views and truly establishes the best and highest asking price.
Do...Secure and uphold confidentiality. Pertinent information leaked out can be damaging during the selling process and can potentially harm your current business. Always insure confidentiality is upheld by all parties involved.
Do...Continue to run your business daily. Carry on business as usual and don't become so overly obsessed with the transaction that your attention deviates from the day-to-day demands, affecting employees, clients, sales, and ultimately costs and profits. Allow your business broker to do their job, so you can do yours. After all, that is why you invested in one.
Do...Have realistic expectations. Knowledge, understanding, and having realistic expectations are the stepping stones to a smooth and successful sale. To become comfortable with the entire process, it's good to know that it typically takes the majority of business owners six months to a year to sell their company. So timing and momentum facilitates clear goals and expectations.
Do...Stay involved and active with the entire process. Simply stated, know what is taking place at all times; after all, it is your company until it's sold. Even if you are feeling tired and burnt-out, remaining active and involved reassures buyers that this one is worth looking at.
Do...Be flexible and anticipate buyer requests. Staying ahead of the game just might pay off this time. Expecting and organizing vital documentation that buyers may need, such as an appraisal on assets, lease copies or insurance information will reduce the stress involved with the transaction. Be flexible doesn't mean you have to disclose all data upfront, it simply means be prepared.
Do...Negotiate, not dictate. Don't be the kind of seller who wants it all at closing, or who won't accept last minute addendums. Depend on your business broker and team of trusted advisors to assist with the negotiations. You're comfortable holding all the cards, but you and your professional experts need to decide beforehand when "to hold" and when "to fold"; either way, do so in an agreeable manner.
By: Business House