5 Tips to Successfully Sell a Business in 2023
If you're planning to sell a business in 2023, it’s easy to feel like the hardest part is getting ready. Yet many M&A deals fall apart or lose momentum in the leadup to signing.
If you're planning to sell a business in 2023, it’s easy to feel like the hardest part is getting ready. Yet many M&A deals fall apart or lose momentum in the leadup to signing. A great strategy is critical to the success of the sale. A deal that falls apart can undermine your company's reputation and make the next deal even harder, so it’s important to chose the right buyer and work to create a smooth process. These five strategies can move the deal forward and increase the chances of success.
Hire a Business Broker or M&A Firm
The M&A process is risky and highly complex. It’s not something you should ever consider doing on your own. After all, your business is likely your most valuable asset, and you’ve probably never sold a business before. The buyer will be working with a team with significant M&A experience. Ensure a fair and equitable deal by hiring your own expertise.
An M&A firm can help with deal preparation. They also oversee the process so you can continue focusing on running your business. And often, their presence helps you recruit higher quality buyers (and screen out window shoppers).
Prepare for Change
The M&A process drives significant change, for you and your company. You must be prepared to accept this change. For many owners, two aspects of this are especially challenging:
- Reducing daily involvement in the business: Businesses which are excessively dependent on their owners are risky investments because, if the owner leaves, customers might, too. Delegate as much as possible to your management team, so that your business is a smooth-operating entity even without you.
- Sabotaging the process: If you’re not fully emotionally ready to sell your company, you may inadvertently sabotage the sales process. Some owners focus on tiny and unimportant aspects of the deal. Others neglect the deal until it fails on its own. Ensure you’re ready to invest the time, money, and effort it takes to close the deal.
Manage Your Expectations
An M&A deal is not magic. It will not immediately transform a failing business. Ask your M&A advisor what to expect, and set your expectations accordingly. This includes timelines, negotiation process, and what due diligence will demand of you. Most businesses do not do significantly better than the average in their sector, so you shouldn’t assume you will either—unless your advisory team tells you there’s something unique that sets your company apart.
Focus on Your Customers
One of the main benefits of hiring an M&A firm is that their work on the deal will clear your schedule so you can continue focusing on your business. You must remain customer-centric, explaining to your clients the reason for the sale as well as what they can expect. Not only does this ensure the long-term success of your company; it’s also key for keeping the deal moving forward.
Communicate Openly and Clearly
Many owners make the mistake of being needlessly secretive about the deal. This is the wrong approach. When you don’t communicate openly, the rumor mill does the talking for you. This can cause employees to leave, customers to find another business to patronize, and steadily erode goodwill and brand identity. Develop a communication plan early, then unveil as much as you can at each stage of the process.