What Not To Do When Selling Your Business
If customers get wind that your business is on the market, they will most likely, in about a New York minute, hike on over to one of your competitors to do business. Losing customers affects the value of the business.
If employees are told that the business is up for sale, think nano-second. If they feel insecure about their future, they may seek what might feel like more stable employment. Fear of new management and whether job cuts would ensue are legitimate concerns for anyone in which your business is their livelihood. If key members of staff left the business after hearing the news, it may seriously cripple the performance of your business. Consequently, not only will the value be reduced, but the chance of selling your business is significantly diminished.
Suppliers may feel that your decision to sell is based around financial difficulties and, if you currently purchase supplies on credit, they may reconsider your position and demand cash on delivery, which may certainly have an effect on your immediate cash flow. Great businesses are sold every day. However, in general, their is a negative perception of a business when it is rumored to be for sale.
Banks are very cautious of small businesses because of their risky nature. So, it is no surprise to how they would react when they find out that yours is for sale. They may decide to put a halt on further borrowings, overdrafts or lines of credit. Or, even worse, put out a call to recover any outstanding debt.
How would you react to news of your competitor putting their business on the market? Very positively one would assume. This is exactly how your competitors will react should they discover that you are selling your business. They would, most likely, take quick action to affect your sales and customer confidence. Competitors would announce it from roof tops if they could to make it known that you are selling so they can reap the harvest of new profits from your old customers.
Contact us today to discuss selling a business and for more information on what not to do.