Entrepreneurs often make decisions based on intuition and experience. So you may have grown accustomed to acting quickly to reap the rewards of a once in a lifetime opportunity. Selling a business isn't like this. It requires planning, time, and a highly measured approach. And the skills you use to sell your products likely won’t be of much use to you as you navigate the process. This is why hiring a business broker to sell a business is so critical to the success of the sale. But before you initiate the process, here are 20 questions to ask yourself to assess how truly prepared you are:
- What is your reason for selling? Is this a reason that will appeal to or alienate a buyer?
- What is the value of your business, and how did you arrive at that figure?
- What are you going to do after you sell your company? How much money will you need to fund that venture?
- Do you have any unspoken assumptions about leaving, such as that your kids will take the reins?
- Who are the most important members of your team? Their titles may not reflect their importance.
- Are your managers prepared to run the business fully in your absence?
- Do you have reasonable forecasts for the future?
- Are you prepared for due diligence? Can you document all claims about your business, in addition to providing contracts, agreements, titles, and other information a potential buyer will seek?
- How quickly do you need to sell your business? If now is not the right time, how long are you willing to wait?
- Is your business currently profitable and growing? If not, what could you do to change that?
- Who is your ideal buyer? Is there a competitor who might like to purchase your company? Or could your company offer significant additional value to a company in another industry?
- What is your ideal structure? Do you have a good understanding of how this deal structure will affect the transaction?
- Do you want to stay on after closing, or do you hope to fully walk away from the business?
- How is the market in your niche right now? How are market factors likely to affect a sale?
- Are you working with a business broker? Have you gotten referrals from colleagues or asked for references?
- Which experts will you need to sell your business?
- Are there any regulatory issues that may come into play as you move toward a sale?
- Does your business have any potential areas of exposure or legal liability? Can you do anything to mitigate them now?
- What will a buyer worry most about with your company? What can you do to allay those fears?
- What are your dealbreakers? What is most important to you in this deal? Do you care about how your company looks after the sale?
