Does it seem like it is impossible to sell your business? Or, maybe hanging on to it just doesn’t sound like a good idea to you at the moment? After all, you can hold on to the business for another year, right? I was just like you. I had a small business that wouldn’t sell. So, I talked to as many brokers and read as much as possible about selling small business’s and this was my plan for a successful sale.
Preparing your business for sale takes more than putting an advert in the window. Follow these steps to get the best possible price for your company, and ensure that the sale goes through smoothly.
Step No 1 – Preparation
This is the most important step in the sequence, and perhaps the most difficult. After all, you need to view your business impartially, warts and all. If the shop floor or office is looking shabby, that is the first impression buyers will have of your business. Decorating and tidying up are duties that anyone with a business for sale should prioritise.
Next, look at the accounts. Is there anything that cannot be explained immediately? Writing off bad debts shows that you are being realistic about the true state of the business’ affairs, and getting shareholder loans repaid removes any suggestion of improper or unwise dealings with related parties.
Now may also be the time to seek professional advice on any outstanding legal or financial issues with your solicitor or accountant.
Step No 2 – Do you need help?
If you have a full book of contacts who are looking for a business for sale, you may not need a business broker. After all, why give away a percentage of the sales proceeds when you can find a buyer yourself? But if you do not have any buyers in mind, or if you would like to approach the market confidentially, a business broker could be worth considering.
Step No 3 – Surviving due diligence
The buyer needs to verify that all the details connected with your business are as they should be. He will ask questions and request copies of documents. This is a normal part of the due diligence that any prudent buyer should perform. As long as you have his undertaking to keep the information confidential, you should be as helpful as possible in providing documents, to push this stage of the deal along.
Step No 4 – Negotiation
Even if negotiation is a skill that comes easily to you, agreeing a satisfactory price will be stressful, and perhaps even emotional. The business for sale represents years of your hard work; so adopting a reasonable, approachable but firm demeanour will ensure that you get an acceptable deal.
Step No 5 – Completion!
So the ink’s dry on the documents and the money is in the bank. You no longer have a business for sale, so you can relax, right? Generally, yes; although make sure that you comply with any post-completion restrictions, like refraining from carrying out a business nearby with a similar name.