10 Ways to Avoid Sabotaging the Sale of Your Business
If you are selling or considering selling your business, the following insights may assist you in the selling process.
1. Establish a reasonable expectation of value for your business. Inflated expectations interfere with your broker's ability to negotiate the best transaction value for you.
2. Carry on "business as usual". Don't become so obsessed with the transaction that your attention waivers from day-to-day demands, thus affecting sales, costs, and profits. Because the selling process can take many months, the buyer needs to keep seeing a healthy business.
3. Engage experts to ensure confidentiality. A breach of confidentiality surrounding the sale of a business can change the course of the transaction. Expert brokers can channel the process and the parties involved to keep the sale within silent bounds.
4. Prepare for the sale well in advance. Be sure your records are complete for at least three years back and do all pertinent legal or accounting "housecleaning" as well as a literal sprucing-up of the plant or shop.
5. Anticipate information the buyer may request. In order to obtain financing, the buyer will need appraisals on all assets, information to satisfy environmental regulations, monthly sales analysis for cash flow purposes, a long lease etc.
6. Achieve the highest price through buyer competition. Since this can be tricky, you are wise to let your broker, as a third party, create a competitive situation with buyers, to position you for the best transaction value.
7. Be flexible. Don't be the kind of seller who wants all-cash at settlement, or who won't accept any contingent payments or an asset transaction. Depend on the advice of your broker and your accountant-with their knowledge of financing and tax implications-to keep the transaction on track.
8. Negotiate; don't "dominate". You're used to being your own boss, but be prepared to learn that the buyer may be used to having his way too. With your broker's help, decide ahead of time when "to hold" and when to fold.
9. Keep time from dragging down the deal. To keep momentum up, work with your broker, your accountant, your lawyer and other experts that may be required to be sure that potential buyers stay on a time schedule and that offers move in a timely fashion.
10. Be willing to stay involved. Even if you are feeling burnt-out, realise that the buyer may want you to stay within arm's reach for a while. Consult with your broker to determine how you can best effect a smooth transition.
In the interests of providing business owners with the resources and knowledge to make better decisions; this article is provided to you with the compliments of the broking team at Ellis Corporate.