Want to Sell Your Business? Answer These Six Questions First
If your business is performing well, hitting financial targets and continuing to grow, 2018 may feel like the perfect year to sell. Why? The market is strong, interest rates are still low and acquisitions are happening in nearly every industry. That combination can quickly garner the interest of business owners, but take a moment of pause before racing to sell.
The process of selling a business is complex, and it requires a substantial investment of time, energy and resources. Hold off on the idea of selling until you’ve adequately prepared your business for the road ahead. Start examining your business by answering these six questions:
WHAT ARE YOUR NON-NEGOTIABLES?
It’s always a thrilling moment when a buyer expresses interest in purchasing your business, and rightfully so. You’ve done the hard work to grow a business that performs well enough that it would garner the interest of others. While the excitement and pride will always be there, don’t let those feelings cloud your judgement. Document your non-negotiables – the components of a sale you are unwilling to waiver against. Are you willing to stay onboard post-sale? Are you comfortable handing over complete ownership? Knowing your non-negotiables will alleviate conversation with buyers who don’t measure up, and will keep you focused on the ones that that do.
CAN YOU CLEARLY ARTICULATE YOUR BUSINESS DIFFERENTIATORS?
As the business owner, you know the factors that make you stand out, that help you compete in the market, and the ones that contribute to continued annual growth. But have you had to answer those questions in a concise and direct manner? Buyers will certainly have questions. The way in which you answer those questions can separate you from other sellers. To capture the interest of a buyer, you must be able to communicate your differentiators. Practice answering what makes you different. Write your responses and become comfortable sharing those responses in a direct and specific fashion. The inability to define your differentiators can lead to a lower sale price or no sale at all.
ARE YOUR FINANCES IN NEED OF UPGRADED SUPPORT?
Many business owners mind their dollars well. That trait is invaluable and should be retained no matter how large the business becomes. But if selling is of interest, it’s likely time to reevaluate your financial support. You’ll need more than a bookkeeper to sell your company. Consider expanding your financial operations now. Begin working with an accounting team that can manage your books, conduct audits and also maintains a strong reputation of merger and acquisition success.
IS THE TIMING RIGHT FOR THE BUSINESS?
Selling your business may be your end goal, but is now the best time? There are many factors that go into the timing of a sale. What’s important is that you as the owner can separate the desire to sell from the reality of today.
IS IT TIME TO REMOVE DIGITAL CLUTTER?
The visibility of your business is heightened because of the digital world we operate in. Buyers have more access to understand your brand, your voice and your customer relationships more than ever before. Whether you’re looking to sell or not, make the time to review and clean up your digital footprint. Does your online voice reflect your differentiators? Is your messaging up to date? Are there negative customer comments that need to be monitored or answered? Buyers will do their research and that includes your online presence. Review your digital footprint and analyze how your business will be perceived through the lens of a buyer.
DO YOU HAVE AN EXPERIENCED ADVISOR IN PLACE?
Part of being prepared to sell your business means have the right team of advisors lined up. You’ll need legal support, financial guidance and the right personnel on staff. Don’t take on the responsibility of selling your company alone. With an experienced merger and acquisition advisor, you can move through the selling process with more confidence and clarity. The right advisor will take the lead on negotiations, on contracts and on securing the best terms behind the sale of your business. So, do your due diligence now. Start the conversation with advisors (like ourselves) who walk hand and hand with sellers, and select a team that can guide you through the process with minimal aches and pains.
Selling your company is a decision that requires as much strategy as starting your business did. While it can be tempting to rush through the process, it will benefit you in the long run to thoroughly analyze the situation before moving forward and continue to set your company up for success both during and after the acquisition.