Thinking about selling your business? It’s a big decision, and one that shouldn’t be made without a great deal of thought. Here are ten things to consider before selling.
1. Know Why You Want to Sell
Before you sell, make sure you really know why you want to sell. Take time to consider the reason you’ve come to this decision and review the alternatives to be sure you aren’t doing something you’re going to regret.
2. Know Your Valuation
Know what your business is worth before trying to sell it. You don’t want to walk away from what has been your passion for a lower price than you deserve. Get in touch with an accredited business appraiser who can give you a legitimate valuation report.
3. Determine if it’s the Right Time
Try to make sure you’re selling at the right time. For example, will you be financially secure if you sell? Have you had time to accumulate enough funds to support your desired lifestyle and/or retirement? Perhaps there are market factors that can impact the value or relevance of your business. It may not be smart to sell while revenue is down. Try to determine if it’s wise to sell now or if you’ll be better off by waiting.
4. Find the Right Broker
You may need representation to help you with the sale, but don’t rush into a partnership with the wrong person.
As Hannah Hottenstein at The Balance notes, hiring the wrong broker can cost you and have a negative impact on your sale. “Do your research and look for someone qualified, capable, and with expertise in selling your specific kind of business,” she says. “There are many ways to find a commercial broker, but one of the best ways is through referrals. Ask your friends, family members, or other business owners if they have any recommendations for you.”
5. You Shouldn’t Let a Possible Sale Keep You From Regular Responsibilities
Even if you are ready to sell, don’t let that keep you from performing your regular duties adequately. It’s in your best interest to keep your business at its highest level. If you were selling a house, you would want to keep it clean and as presentable as possible. The same goes for your business. Don’t deter potential buyers by not doing your best.
6. You Should Make Sure You’re Really Ready to Sell
The timing of your sale is one thing, but selling a business you’ve built from the ground up is also an emotional endeavor. Be sure you’re really ready to part with your business and that you won’t look back in regret.
7. Shop Around for Buyers
Don’t be willing to simply jump at the first offer you receive. Test the market, and see what potential buyers are out there. Your broker can help you find candidates, but you can also talk with investment bankers and Mergers & Acquisitions (M&A) advisors, as well as checking in with online marketplaces.
8. Think Beyond the Price
Don’t forget that you can come out of the sale with more than just what the actual price ends up being.
“The purchase price is not the only factor in a business sale,” says Sean Peek at Business.com. “Consider salary guarantees, stock payouts, installed payments, a future ownership stake and various sale provisions. Ensure you and your team view the final contract in its entirety.”
9. Be Willing to Help with Transition
It’s a professional courtesy to help out with the transition when you transfer ownership. It will be good to know that you’re leaving the business you built in capable hands. If you’re there to ensure a smooth transition, you’ll be helping to get the new era off to a good start.
10. Know What You Want to Do After You Sell
Finally, have a plan for yourself for after the sale. Are you going to retire or pursue a new venture? Have something to look forward to so you’re not fixated on the past.
Selling your business is a major life decision. Put as much consideration into it as possible to ensure that you are happy with the path you’ve chosen.