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Getting ready to sell your business

October 10, 2017

To successfully sell your business for the best price and value requires a lot of time and effort, strategy, teamwork, research, planning, networking, patience and commitment. There are a few important fundamentals you should get right to make the whole process go smoothly and stress free.

Deciding whether to put your business up for sale should be based on an accurate assessment of market demand to maximize the chances of attracting high volumes of interested buyers. Preparing your business for sale is a sophisticated process that requires a lot of planning and a willingness to work hard so that the health of your business makes it more appealing to prospective buyers, thus making a speedy sale feasible.

Here are 10 things that you should consider once you’ve decided to sell your business:

 

Understand the buyer

To reduce the risk of failure as far as selling the business, it’s important to understand the market and the buyers’ demands. Typically buyers want a high level of transparency and trust before making the purchase. Put together details about your business, outlining what buyers need to know to help them make an informed decision about buying your business. By doing so, you have a greater chance of getting the best price.

 

Conduct due diligence

Make no mistake, buyers will want to quiz you on all aspects of your business so it’s essential that you have a firm grasp of the company’s financial situation, its contractual obligations, value proposition, competitive advantage or market positioning.

 

Don’t attempt selling the business yourself

A professional business broker is indispensable to the sale process. Make sure you choose a credible broker who can represent you fully – protecting your interests and helping you capitalise on opportunities. Make sure you’re happy with the broker you choose.

 

Settle any outstanding legal matters

Often buyers don’t want to inherit unresolved legal burdens therefore it’s necessary to ensure that all disputes are resolved if you wish to have the upper hand in the sale negotiations.

 

Have a realistic valuation of your business

Understanding why buyers would be interested in buying your business in its current state is key. You should invest in researching your industry and analysing your company’s financial performance compared to industry standards and checking what the market rates for similar businesses are.

 

Prepare a convincing case for partners and key shareholders

Make a determination to evaluate whether your decision to sell will be agreeable with your partners or shareholders because when it comes to closing the sale, you’ll have a stronger case if backed by them.

 

 

Think through the sale from your employees’ perspective

Key personnel are indispensable to any successfully run business and you should make sure that you do everything in your power to ensure those who have worked hard to build up the business don’t get disadvantaged in the process.

 

Learn to find the right buyers

Business buyers are interested in particular businesses for different reasons, for instance some buyers focus on revenues, some are interested in the intellectual property, and others are brought to the table for other reasons. Pinpointing what makes your business attractive to those varied potential buyers will help you sell quicker while still getting excellent value.

 

Create an effective marketing plan

Think about how you’re going to present the brand and tell the story so that it resonates with buyers. Most entrepreneurs are fuelled by passion so by choosing the most effective communication delivery channels you increase resonance.

 

Take a holistic view of the business

It would be beneficial to the sale of your business if you consider basic operating issues such as key contracts and suppliers, key employees and employment contracts, customers, competitors, and all other aspects of your business. You should also identify areas of your business that need improvement and start making steps to improve those areas to ensure a successful and stree free sale of your business.

 

By following the above, you’ll be taking steps in the right direction to preparing your business for sale and keeping your business healthy to give yourself plenty of options.