Selling a business checklist
Consider your reasons for a sale. What will a sale allow you to achieve in your personal life?
Choose the right help
If your business turnover is greater then £500k and you do not have past experience of selling businesses utilising the skills of a business transfer agent or a business broker will greatly increase the chances of a successful sale.
Understand the process
If you understand the process you can better identify the areas where you need help and will allow you to better present the business to potential buyers. Guide to the process of selling a business
Outline your business sale goals
Not only is this important to set goals for your self but it helps define what you expect a business broker to achieve ask; How will you achieve the best possible selling price?
Decide on a realistic business valuation
A business is only worth what someone is willing to pay for it. Therefore you should decide what figure will make it sensible for you to sell your business. Be realistic with projections and build a strong case to backup all your forecasts.
Ask your self what are these estimates based on and how can I best portray the earning power of this business.
Explore your options
Take a look at the different deal types available to you perhaps your management team could buy out the business, if this is not a possibility the best course of action might be to use an intermediary company to approach the competition confidentially to ascertain if there would be an interest in consolidation.
Keep your eye on the ball
Using professional help to manage the sale can allow you to keep your business running smoothly. Selling a business is a time consuming process it is critical you keep the business performing throughout so as not to impair the sale value.
Keep calm and carry on!
Most owners underestimate how much of an emotional roller coaster selling a business can be. Your business is likely the culmination of your life’s work and taking criticism about it will be part of the negotiations.
Don’t take criticism of the business personally the buyer will be looking out for their best interests. It is important to reassure the buyer and sell them the business stay positive and see the big picture. If a buyer has an issue the best option is usually to take good note of what they are saying and come back to them later with a strong response. This will stop you getting bogged down in the nitty gritty.
Know when to call it a day
Sometimes an agreement cannot be reached, nobody is in the best state to make important business decisions at 3'oclock in the morning. Sometimes the best thing to be done is to call it a day and come back to the table fresh headed. If an offer is below the realistic value you have set yourself and a buyer will not negotiate sometimes the only thing to do is to walk away. In this difficult situation having the strength to walk away can also demonstrate your confidence in the businesses value.
Take your time
A fast sale probably isn’t a sale for the best selling price, finding the right buyer for your business will often take time and even with a ready buyer selling a business with a deal value of £1-20m will take at least 3 or 4 months to conclude.