Selling your business is likely to be the single most important financial decision you’ll ever make. Therefore, you must prepare far in advance. Let’s look at some of the key items you’ll want to consider before placing your business on the market.
Settle Legal Issues
When it comes to selling a business, legal issues should be at the forefront of your thoughts. After all, selling your business does involve the creation and execution of a complex and detailed legal agreement. There are many times in life where it is possible to cut corners, but hiring a good lawyer or law firm is not one of those times. Moreover, you’ll want to settle all litigation, environmental issues or other issues that could potentially derail a sale.
Deal with Serious Buyers
Working with a good business broker or M&A advisor is an essential part of the selling process, as these professionals will help you to weed out “window shoppers” as well as prospective buyers who are simply not a good fit for your business. Any serious buyer should be willing to submit a Letter of Intent. Everyone should be on the same page as far as price and terms as well as what assets and liabilities are to be assumed. This second point reinforces the first point. An experienced lawyer is essential to help guide you through various aspects of the sales process.
Be Flexible on Price
Be prepared to accept a lower price than you might ideally want. There are many reasons that this may occur, ranging from a lack of management depth and a lack of geographical distribution to a dependence on a limited number of clients. Reliance on a small number of customers and/or clients can give potential buyers pause, as it could raise concerns regarding the stability of your business. Addressing these issues years before placing your business on the market can help you achieve the price point you desire. This is yet another reason to work with a business broker in advance.
Improving Your Chances for Success
The are other steps you can take to enhance the value of your business. Increasing the visibility and profile of your business is always a savvy move. Consider attending trade shows, boost your online profile by stepping up your social media game and explore creating a coherent public relations program.
Finally, selling a business is often a waiting game. You have to be psychologically prepared to wait a considerable period of time before your business is sold. Most businesses sit on the shelf for a considerable period of time before they are sold.
Preparation, patience and good organization will dramatically increase your chances of selling your business and achieving a satisfying price. The sooner you begin organizing your business and working with experienced professionals, the greater the chances of success will be.
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