You Want to Sell Your Business — But What is the Best Way to Go About it?:
Selling a business is
the most valuable transaction any owner will ever make. If you compare it to
selling a property, naturally we always want the best price. We spend time
presenting it in a way that is more attractive to potential buyers. So it
always surprises me that when business owners sell their most valuable asset,
they often miss the opportunity to maximize the value and increase their
chances of success. What many business owners don't realize is that there is a
right time to sell. The biggest hurdle is that often, businesses are just not
ready for sale.
Luck favors the
prepared. To ensure that you get maximum value, preparation is essential. Speak
to experts and select an advisor who will walk you through the sale process,
much like an estate agent for your home. They will draw you to some key areas
for example if you are looking to leave the business, you must ensure that the
people who will run it are credible and can ensure that the business continues
to be successful. As part of the due diligence process your prospective buyer
will want to access a number of your documents, start by pulling these
documents together in one place.
Don’t forget, buyers
want something with value. Sell the unique points of your business. Put
yourself in the shoes of a buyer and ask yourself some key questions. How easy
is it to copy? How many competitors are there?
Your intellectual
property is another key area that is so important. You definitely don't want IP
issues to arise at the due diligence stage of a sale process. Such issues
will inevitably result in delays, price chipping, or worse scenarios such as
the buyer withdrawing.
Business owners often
assume that their buyer will be a competitor of theirs. It could be of
course. However, spending time identifying buyers where there is some
clear synergy between your businesses can be an invaluable exercise. Try
to think out of the box and consider buyers who may be in a different market.
This may help sell your service or product through different channels. The
right purchaser, and typically one that is not your closest competitor, can be
the one that pays the highest price. Once you know who will be interested, you
can tailor your preparation to suit their needs.
Selling a company isn’t
easy. It takes time and commitment; issues will inevitably need
addressing before you start the process of selling the company. Buyers need the
confidence that you have built something that is sustainable, that has a good
reputation, and most importantly they know has a strong future under their
ownership. The only way to achieve this is to plan your exit by preparing
to your business for sale. So seek the advice of experts - you will reap
the rewards both emotionally and financially.
Source: You Want to Sell Your Business — But What is the Best Way to Go About it?
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