So you’re ready to take the plunge—you’ve put in the sweat and tears, built your business from the ground up; and now it’s time to sell. At least that’s what you think!
Selling a business can certainly seem like a complicated, overwhelming process. Rest assured, the rewards are often incredible, and the sale itself can be life changing. Follow these six key tips below to ensure that the entirety of the sales process is smooth and successful. And if in doubt, call the expert brokers of Del Lingco International.
1. When it comes to selling a business, be candid about why you intend to sell, and take the time to fully understand what it could mean for your lifestyle. Burnt out? That’s OK. Give yourself some time to come to terms with the change a potential sale may mean—both personally and professionally. Small business owners tend to make the mistake of undervaluing their companies, and six months down the road realize it’s just not enough of an evaluation to walk away. To avoid this trap, carefully assess how much capital you need. Assess your lifestyle and monthly payments. Make certain that the value of the potential sale will ensure you are financially comfortable.
2. Buyers aren’t interested in potential. Business owners who believe they’ve created a potential gold mine sometimes expect top dollar. Unfortunately, this typically doesn’t pan out. If a business is just a concept, so is the sale revenue. In selling a business, make sure you have the financials to back up your list price, and the assets to prove its worth.
3. Buyers expect confirmable financial stats. This naturally follows the point above. If you claim you have revenue pouring in from a certain source, you must be ready to come to the table with proof. Be prepared to supply a buyer with invoices, deposit slips, records, online financial accounts, or other documentation that proves the worth of your claim.
4. Be prepared to answer a seemingly endless string of questions. Simply put, selling a business yourself always involves a lot of question and answer sessions. You need to be able to answer anything that is thrown at you, regardless of how simplistic or common knowledge it may seem. Some buyers are just looking for red flags, while others are attempting to pick your brain for tips and tricks. Be patient and gracious in sharing information.
5. Never judge a potential buyer. You have probably heard the phrase ‘never judge a book by its cover.’ The same goes for buyers. You can never truly know who you are dealing with, the finances they possess, or their buying power.
6. Make a detailed plan for management succession. Who knows your business better than you? If you are vital to the operation of your business, then who will a potential buyer be able to turn to for questions, concerns, or assistance in running the day to day operations after you leave? It helps to develop a plan to gradually train and delegate key concepts and responsibilities to the new buyer, and senior members of his or her team. Often times a buyer’s primary concern is if the newly purchased business can continue to operate successfully—and generate revenue–after the current executive steps down.
Though these tips are helpful, the professional services provided by a business broker can be life-saving. Put Del Lingco’s experience to the test by calling now if you are looking to sell your business.