If you follow these “Ten Commandments” you will have a much better chance of selling your business! Ignore these and stay on, and you might leave your business feet first.
1. Set a reasonable price on your business. An unrealistic price discourages many potential viable buyers from even considering your business and it invariably slows down the entire process.
2. Prepare for the sale well in advance. In fact, if you are smart you establish an exit strategy the moment you begin your enterprise. That aside, you will want to have your portfolio of business facts prepared and ready for review in advance of interfacing with buyers. Additionally, you will want to attend to any “housekeeping issues” that could prove negative. It’s like staging a house.
3. Engage a trusted professional advisor to lead and broker your transaction. While you may have never sold an enterprise before, trust the time and expertise to someone who has helped many. Selling a business is loaded with pitfalls and this is not a time for a new do-it-yourself” project. Do so only with a confidentiality appointment.
4. Anticipate what information the buyer may want. Work with your advisor to anticipate your buyer and their lenders will require. This will surely include at least three years of financial records and tax returns. A clean organized presentation is so much more attractive.
5. Carry on your business as usual. In other words, keep your focus on the health, growth, and vitality of your enterprise and don’t become obsessed with the sale. Delegate the details of the transaction to your advisor.
6. Be flexible. Sure, every buyer wants all-cash at closing, but be open to consider a combination or other types of financing. Depend upon your advisor and be sure to take into account the tax ramifications.
7. Be willing to stay involved after the sale. No matter how you feel, the buyer may need and want you to stay on in some kind of consulting capacity to better assure their success. Check with your advisor as to how this might best be accomplished.
8. Keep the sales processing moving. Do your part to keep the transaction on schedule and be responsive to any offers. Delays and particularly ones you cause can kill deals.
9. Leverage buyers. A well-positioned properly priced enterprise may garner multiple offers. Consult with your advisor, but don’t be afraid to create a competition among your potential buyers.
10. Negotiate for a win-win outcome and don’t try to dominate. While you may be accustomed to being the boss, now is the time to check your ego and the buyer may also be used to getting their way too. Decide ahead of time which battles are worth fighting and which are not.