Every major decision requires careful thought and consideration, and very few decisions in an entrepreneur’s life will ever be bigger than the decision to sell a business. For those business owners thinking about possibly selling their businesses in the future, it’s not as simple as putting up a for-sale sign, inviting bids, choosing the best one and making the sale. There are several things every business owner ought to take into consideration so below we explore four points to focus on when planning the eventual sale of your business.
1. Is the timing right?
Whatever your reasons for wanting to sell, the process can be financially and emotionally rewarding if done right so that you derive the personal satisfaction of knowing that what you created will continue on in the hands of people you have confidence in and the gratification of knowing that you have given someone else the chance to be a small business owner, and experience the same joys you had building your business. Making strategic decisions at the right time will help you achieve the most favourable outcome. You cannot expect to get a great deal for your business if you haven’t done the necessary preparation prior to selling. Set a clear set of business, personal, family, and financial goals. Establish a roadmap for your marketing and sales strategy, and most importantly, crunch the numbers.
2. Have you assessed the market?
Paying attention to what is happening in your industry is crucial to providing those much needed insights into the price fluctuations, market valuations, what prospective buyers are looking for, and so much more. Typically approaching a reputable broker who has a finger on the pulse of what is happening in the marketplace and who can provide information on the latest trends is the best way forward. A significant number of opportunities are missed because of bad timing. Business owners should be in the habit of regularly reviewing their financial statements and paying close attention to sector developments because this will ensure that a business owner stays ahead of the curve and fully prepared when entering the sales negotiation processes.
3. What are your objectives for the sale?
Be sure that you really want to sell before embarking on the process of prospecting for buyers or marketing the business for sale because if you haven’t thoroughly considered all your options, you can end up wasting valuable time. Think about the terms which you would like ideally met during the process and make sure your expectations are aligned with the market realities. Every business has their personal reasons for wanting to sell, sometimes it’s because the passion for the enterprise has weaned or simply they want to pursue other endeavours, so as an owner do some self-reflection and understand your reasons for considering the sale because that will also help you prepare for relinquishing control of a business who have worked hard to build. Also think about what buyers are looking for, what is in your best interest and what you are willing to compromise on.
4. Should you hire a professional business broker?
You need to remember that you’re selling the company, not yourself. Buyers evaluating your business will require a lot of convincing on top of proof of operations such as financial information, tax returns and details regarding the current balance sheet. Other bits of information that might be valuable for a buyer include permits, licensing, leases, customer and vendor contracts, supplier lists, and marketing materials. The business transfer agents and brokers at Hilton Smythe assist you with getting a professional valuation of your business and give you the right advice, find the right buyers, and help you navigate the complex legalities that come with selling your business.
Thinking about selling your business? Then get in touch with one of the UK’s leading business brokers for your FREE no obligation business valuation.