The Variables Involved in Selling Your Business
Selling a business is a complex process that boils down to this: Finding the right buyer. In a recent Forbes article, “Ready to Sell Your Business? Follow These 3 Tips to Find the Best Buyer,” author Serenity Gibbons, a former assistant editor of the Wall Street Journal, outlines the multifaceted process of selling a business.
Gibbons cautions small business owner to thoughtfully consider when, how, and to whom you sell your stock. “Create a for-sale plan that sets up the business for long-term success,” she recommends. To sell your business the right way, have a coherent and well thought out exit strategy in place. In fact, many experts feel that you should have an exit strategy in place even when you first open your business.
If you’re like most small businesses, a large percentage of your wealth is tied up in your business. Unfortunately, studies indicate that only estimated 20% to 30% of businesses on the market actually find buyers. This important fact means that business owners are vulnerable if they can’t sell. It is vital for business owners to make their businesses as attractive as possible to buyers for when the time comes to sell.
To make a business attractive for sale at the best price, “the owner’s role has to be relatively easy to transfer, ” says Michael Lefkowitz, author of the exit planning book “Where’s the Exit.” “Before you make your exit, you have to take some time to step away from daily operations, polish the appeal of your brand, update your books, and build up the capability of your subordinates,” Lefkowitz says. In short, you have to become replaceable.
Gibbons notes that “not every buyer with cash in hand is the right buyer for your company.” Three key variables must be addressed when looking to find the right buyer: consider your successor, explore your broker options and find a pre-qualified buyer.
In the end, working with a business broker is the fastest and easiest way to check off all three boxes. An experienced professional knows the importance of working exclusively with serious, pre-qualified buyers. Since a good business broker only works with serious buyers, that means business brokers can greatly expedite the process of selling your business.
“Assuming you choose wisely, this person will know how to craft a unique and compelling narrative about your business to inspire people to pony up the necessary dough—all the while helping you navigate the emotional ups and downs that accompany the selling process,” says James Moran, founder and managing partner of ValueStreet Equity Partners, a San Diego-based small business investment firm.
Those looking to get their business sold and reduce an array of potential headaches along the way, will find that there is no replacement for a good business broker.