Top Tips for Selling Your Business
You have worked hard to build up your business, and now you are ready to sell. As with most other things in business, attracting a buyer and closing the sale are not as simple as they might first appear. There is no reason to be discouraged, however, because with a bit of knowledge, preparation, and effort, a successful (and profitable) sale is entirely within reach.
Let’s look at a few of the top tips for selling your business:
1. Prepare your business in advance
Potential buyers will take a very close look at all aspects of your business, so beginning thinking in their frame of mind before placing your business for sale. This means making the business as strong as possible financially, as attractive as possible physically, and as promising as possible looking into the future.
Make every effort to improve financial strength, including keeping costs down and increasing revenues as much as possible. Now is not the time to rush out and buy all new computers, for example, because that kind of large expense will detract from the financial attractiveness of your business. Focus on your customers, too, because when you can demonstrate a strong, profitable customer base your business appears even more attractive to potential buyers.
Take a fresh look at the physical aspects of your business, especially from the viewpoint of a potential buyer. When you walk in, does it look clean and professional? Are the walls, carpets, and the like in good repair? How about the windows, are they clean? The physical appearance of a business is one of the factors most overlooked by sellers, but it is also one of the factors most noticed by potential buyers. If your business appears drab, run down, messy, or unkempt, what kind of impression does that create when a potential buyer walks through the door? You can make dramatic improvements quite easily with a fresh coat of paint, a bit of cleaning up, and the like.
The future potential of your business is also an area of interest for potential buyers. Even the best record of financial performance will lose its shine if the future financial performance appears to be at risk. Do you have long term contracts in place with key vendors and suppliers? What deals are in place to attract and retain long term customers? Are your employees well cared for and unlikely to bolt at the first sign of a potential sale? The most important idea here is to do everything you can to demonstrate the strong future financial potential of your business.
2. Prepare yourself and stay focused
Once you have made the decision to sell, it is easy (and quite common) to lose focus and let your attention stray to other things. This is one of the worst things you can do, though, because if you lose focus on continuing to run your business you actually hurt the value (and eventual selling price) of your business.
It’s tempting to think past the sale and start planning your next endeavour, but you must resist this urge. Instead, focus your attention even more on the operation of your business, keeping it in the strongest financial position possible. Continue paying attention to all of the key indicators of success, such as sales figures, profit and loss, customer care, and anything else associated with the day to day operation of the business.
It is important, too, that you prepare yourself for interactions with potential buyers. They want to learn everything they can about your business, and you want to present your business in the very best light possible to maximize the selling price. Take some time to brainstorm questions a potential buyer might ask, and prepare the best answers possible to those questions. You can even role play with a trusted friend or business associate, practicing your answers until they feel comfortable.
3. Offer attractive terms of sale
Potential buyers are looking for a solid business to buy, but they are also looking for attractive terms of sale. You can go a long way toward a successful sale just by making your terms of sale as attractive as possible without sacrificing your own financial needs.
For instance, think about the kind of financing your potential buyers might find of interest. Many will not qualify for full financing from a bank or lending institution, so consider financing part of the sales price yourself. Your buyer will benefit from the more favourable terms, and you will benefit by closing the sale and making added interest from the amount financed. Another way to make the terms of sale more attractive is to lower the down payment a potential buyer has to make to you.
Selling your business is no small task, but it certainly is not an unmanageable task. Take the time to truly prepare yourself and your business for the process, and you are much more likely to enjoy a successful, profitable outcome.
This content was provided by one of our users, Jamos