1. Selling Your Business
Selling is the most popular exit strategy for business owners. In some cases, there are no successors who wish to continue the activity; in other cases, selling was always the owner’s plan, in order to convert the business into liquid assets at a certain point.
Whatever the reason for selling your business, by following these tips, you’ll make sure you’ll find the right buyer and get the best price.
Sell at the right time for the right reasons
The most common reason for selling a business is that the owner is too ill or too old to continue running the business. This is the wrong time to sell a business. Under these conditions, it will be extremely difficult for the owner to cope with the additional stress of selling a business, and the buyer will use these circumstances as leverage in negotiations.
So, do not wait until then! The right moment to sell is when you are still healthy and you have a successful business for sale.
What are the right reasons? In some ways, selling your business is very similar to selling a home. When you list your house for sale, you do not say that you want to sell it because it is too small; you say you want to move closer to work, for example. When you sell your business, you’re doing it because you want to follow a different opportunity, because you are looking for another lifestyle, such as retirement, because you are moving to another city, etc..
Be clear about what you sell
Before selling your business, you have to consider all the assets and decide which are for sale. Often, selling a business includes assets such as goodwill, trademarks, or customer lists, as well as physical assets. The value of these will depend on their quality.
You have to decide if you are going to sell the business as a sale of assets (if everything in the company is on the market, but not the company itself) or as a sale of shares (if everything is for sale, including the company itself). Consider that a prospective buyer will prefer the first option.
A last tip for selling a business
Selling your business is serious business, so it takes time and effort to do it right. Careful preparation and use of available professional resources is the way to get the best possible price. The key to a successful sale is to set a fair and realistic price and clearly present how this price is supported by documents and the activity itself. Next