Selling your own business is never a simple task. For one thing, it represents saying goodbye to an enterprise you have likely put a lot of time, effort and money into – not to mention the emotional investment made.
At the same time, your company needs to be in the best shape possible to attract the attentions of the best possible buyers and fetch the highest price. Getting everything ship-shape before it is time to sell should be a priority to ensure this.
Below, we have run through our top ten tips to make sure that selling your business is as stress-free as possible.
Explore your motivation for selling
It is important to understand why you are selling up so you can best shape your approach here on out. If you have another opportunity awaiting or are planning a wider lifestyle change, it is worth having a proper strategic plan – complete with goals and an actionable timeline – to make sure it can work. Waiting until you tire of your business, or are too old or busy to maintain its operations, is a recipe for disaster, and unscrupulous buyers will take advantage.
Work out what you are selling
The business that you sell is not just the physical space it occupies or its inventory; it encompasses its operational past, competitive advantages, customer base and brand loyalty, intellectual property or copyrights, licenses and patents, all of which are potentially valuable to an interested buyer.
Also worth remembering is that incorporate businesses can be sold as an asset sale, or a share sale which includes the incorporate element.
Decide on timing
Timing is everything, as they say, and getting the best result for selling your business is no different. No matter the sector, type of business, tenancy arrangement or even geographical location, the various markets you will be dealing with will fluctuate with time. Do your research, check recent trends and speak to those in the know to ensure that you’re not about to enter a bubble – or miss a boom.
Properly value your business[
Tying each of the previous points together, you need to consider the current market, economic trends and what other similar businesses have sold for to determine what your own is worth. There are professional appraisers who can give you a formal valuation, which can be useful for swaying potential buyers and avoiding any legal troubles down the road. Moving from a valuation to a selling price is more of an art than a science, but do not be afraid to adjust it to match the current buyers’ market.
Have a spring clean
Cleaning up your business is important in making it an even more attractive proposition to buyers. This starts with your premises or office, doing any repair work, replacing any fixtures and even giving it a lick of paint.
This can also extend to a “financial” spring clean too: it’s advisable to get an audit together that covers the past few years which, though potentially a hefty financial outlay, is a great way of demonstrating your business’ profit history to potential buyers. Also ensure all tax is paid up and any outstanding legal matters dealt with!
Prepare your documents carefully
As part of the “spring clean”, it can pay dividends further down the line to have all of your facts and figures organised and laid out properly for buyers to eventually see. Being able to give and quote accurate figures – preferably with breakdowns with different categories of income, outgoings, turnover and everything in between – will boost your credibility with potential buyers.
Setting up clear channels with potential buyers is a key part of the selling process. Most will want to ask detailed questions before even meeting you face-to-face, either to satisfy their specific inquiries or to go over any inconsistencies they might perceive about your business. Answering enquiries quickly, fully and professionally is generally advised.
Additionally, it is worth insisting on offers being made in writing only. This will allow you to compare them in a meaningful way, rather than trying to weigh up apples and oranges.
Get professional help
Whether helping evaluate your business, advising on legal matters or just offering another professional perspective, professional help is available at all stages in the selling process. A good broker can be particularly valuable, as they will not only have an overview of the entire process but could have access to buyers that would be otherwise closed off. They can also help market your business, run effective competition to drive up bids and will ensure any deal goes through to completion.