10 Tips to Help You Sell Your Business
Opening a business is on many people’s bucket list. To actually do it, then grow it to the point where you’re ready to sell, is a huge accomplishment.
Opening a business is on many people’s bucket list. To actually do it, then grow it to the point where you’re ready to sell, is a huge accomplishment. When you’ve invested so much of yourself in a business, letting go can be difficult. So too can preparing for valuation, negotiations, and other challenging aspects of the sale. Sage advice from an experienced advisor can help prepare you. No matter who you are, what your business offers, or how you plan to sell, these 10 tips can help you make the most of the process:
- Have reasonable expectations about the length of the process. Selling a business can take anywhere from 6 months to 3 or more years. If your business isn’t in premium shape, the preparation and sale itself may take longer.
- Rely on expert assistance. Hiring a professional business broker will help you gain more market visibility. Your broker will connect you with qualified buyers and help you understand your company’s market value—as well as any strategies you can adopt to improve value.
- Keep it under wraps. If news of your intent to sell leaks to early, you’ll end up with competitors poaching your team, suppliers and staff jumping ship, and a serious threat to your business.
- Get experts to help you determine the true worth of your company. Hard work and emotional attachment are not value drivers. You need expert insight to determine what your company is truly worth, and you almost certainly lack the detachment to value it yourself.
- Gather the right documents. Due diligence is a rigorous, challenging process during which you must prove your claims about the business. Ensure your bank statements, balance sheets, profit and loss, and other financial documents are in order and ready to go. If they do not paint a rosy picture consider delaying your sale until you can get things in order.
- Draw a line between company and personal expenses. Do not use your company to fund your personal expenses or pet project.
- Carefully vet buyers. It’s not enough for a buyer to seem interested. They must be financially qualified to buy your company, and sufficiently knowledgeable to run it. The right broker can help you prequalify buyers.
- Clean up your buildings and offices. A business needs curb appeal, too. Make sure your company looks to visitors like a well-run operation, not a chaotic mess.
- Stay on top of your commitments. Start paying down debts, and eliminate any areas of potential legal exposure. Leaving these things lingering in your wake increases risk to the buyer.
- Ensure your team can work without you there. Your company is only as valuable as the team who can run it in your absence. If things fall apart when you leave, the value of the investment for the buyer is zero. So if you’re micromanaging your people instead of letting them do the jobs you hired them for, it’s time to stop.