To get ready for the exit strategy, it is very important to understand why you want to sell your business. The outcome of the sale is directly influenced by the intentions and reasons why you decided to sell your business.
- Examine the motivations and what you expect from this sale. The first step is to identify why do you want to sell. Money? Do you want to move but you are tied up with the business? Do you want to retire? Do you want to change your domain and buy another business? Or are you just bored?
Factors such as illness, a family death, or a bored owner are motivations for a quick sale. Under these circumstances, the seller is willing to accept a lower price from the first qualified buyer. If you move too fast, you lose sight of certain aspects, which will result in a lower offer from the buyer.
Other business owners are more strategic and plan the exit strategy in advance, without hurrying. Their purpose is to put money aside for retirement or to pursue a new business. Under these circumstances, the owner is willing not to rush, prepare his sales business, and wait for the right buyer. These owners are usually more flexible and available to finance part of the deal, which will lead to a qualified buyer who will be willing to pay a higher sale price.
- Define your interests after the sale. All owners hope to get the best price for their business, but many are also thinking about the future of the business. Some want to get away from the business and not have to deal with it anymore, while others want to participate in the company’s activity, whether as an associate, as an employee, or as a consultant for the new owner.
As a seller, is it important that the business stays in the current location? Is there anyone from the competition you prefer or would not prefer to sell your business to? Is there an employee or a family member who would prefer to take over your business?
In the end, the seller’s motivations have a direct impact on the terms of the transaction and his expectations with regard to the sale. Many buyers will ask why you want to sell. The answer to this question will influence their offer, so make sure you have defined the motivations and expectations that are important to you.
- Identify and resolve any conflicts that may exist. Once you have examined your motivations to sell your business, there will probably be conflicts. You want all the money down, but at the same time you ask for a high price. These conflicts could jeopardize the success of the sale, so it’s time to set your priorities in order of importance as you formulate a sale strategy. A business broker can help sellers solve these conflicts, prepare for the exit strategy, develop a sale strategy, and get the best results.