Selling a business is a big decision and involves careful planning and preparation.
Before starting the process of selling your business, it is important to have a clear understanding of your goals and reasons for selling. Because your business is an entity you’ve nurtured from its conception, your attachment to it will be significant, and so will the reasons for your decision to step away. In light of that, for a successful sale, it’s vital to understand the ‘why’ first: what will you do next, are you ready to retire, or do you want to move on to a new venture?
Once you have determined your strategic destination in this endeavor, here’s how to start.
Determine the value of your company
Before looking for potential buyers, it is important to determine the value of your company. This can be done by conducting a professional business valuation or seeking the advice of a trusted accountant. It may also be helpful to hire a mergers & acquisitions advisor to assist with the selling process. Additionally, make sure all paperwork is in order before starting the selling process.
That last point creates a smooth segue into the next step.
Clean up your business financials
It is important to make sure that your financials are in order. This means ensuring all expenses and revenues have been accurately recorded on an accrual basis, a balance sheet is available, and all necessary documents such as tax returns are up-to-date. Prospective buyers will want to see these financials before making any decisions, so getting them organized early on can save time and facilitate a smoother transaction. Additionally, having clean financials may also increase the value of your business.
Prepare your exit strategy in advance
It is important to have an exit strategy in place before starting the sale process. Some possible exit strategies could include selling the business to another company, passing it on to a successor in the company, or bringing in a private equity firm as a financial and strategic partner. By preparing for these possibilities beforehand, you can ensure a smooth transition and protect yourself financially.
Additionally, having an exit strategy can make your business more attractive to potential buyers. It shows that you have thought through all aspects of the continuity of the business and increases confidence in the future success of the company. Don’t overlook this crucial step in the planning process. Prepare your exit strategy and safeguard your future success.
Boost your sales
But how? First, revisit and re-analyze your customer base to refresh your understanding of their needs and any potential shifts in the industry, where your products or services is concerned. This will help you identify how to effectively market to them. Additionally, your sales channels including staying active on social media and building a strong online presence can attract new clients and keep current customers engaged. Finally, consistently review and improve upon your sales process to ensure maximum efficiency and success. By implementing these tactics, you can boost your sales and drive more profit for your business – a very attractive look for your company in anticipation of its sale.
Next, it is important to prepare all necessary documents and financial information for potential buyers. This includes creating a comprehensive list of assets, updating legal contracts, and organizing financial statements.
Find a M&A Advisor
Finding a reputable and experienced mergers & acquisitions advisor can be crucial in successfully selling your business. An M&A advisor can handle the marketing of your business, negotiations with potential buyers, and other important tasks. When seeking out an advisor, be sure to ask for references and thoroughly research their track record. Find someone who has experience selling businesses in comparable industries or with a similar business model. It is also important to have a clear understanding of any fees or commissions that will be charged by the M&A advisor. Overall, finding the right advisor can greatly increase the likelihood of successfully selling your business at the desired price.
Finding a buyer
The right M&A advisor will help you find the right buyer.
They will have experience similar industries, as well as understanding of the market and current sales trends.
Additionally, they can advise on necessary steps to take before listing the business for sale, such as obtaining an updated valuation or reviewing contracts and agreements.
It is also important to consider whether you want to sell the business to another company or private equity. Both options have their own benefits and drawbacks, so it is best to consult with your M&A advisor before making a decision.
Lastly, make sure the advisor has a plan to strategically target potential buyers. This will increase the likelihood of a successful sale.
In what can be a very deep pond, partnering with the right M&A advisor, will help you land the big fish.
Handling the deal structure
The fiscal side of the deal is still ultimately the bread and butter. It is important to consider your financial needs before selling the business. Will you sell all or just a portion of the company? Will you receive payment upfront? Will there be a seller note? Can you roll-over some equity to allow you to capture more wealth as the business grows after you sell?
Next, carefully consider your buyer pool. Are you open to selling to a larger corporation or a private equity firm? This decision may impact the price and structure of the sale.
Overall, preparing to sell your business takes careful planning and consideration. With proper preparation, you can maximize profits and set yourself up for success in the future. It stands to reason then, that having the right partner in the process is crucial.
Destined is that partner – let’s get in touch, click here.
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