Your business could be your single most important financial asset. You have led its development and growth, with patience and care and, now that the time has come to consider selling it, patience and care are even more vital.
Stage 1: Plan
Give yourself time. On average it takes close to 2 years for a business to sell. While planning the sale, don’t take your foot of the gas. A declining business is worth less and will quickly become unattractive to buyers. Take the time to ask and answer questions around the sale value of your business and to decide whether a friendly buyer, such as an employee or family member is ready to jump in.
Stage 2: Prepare
Buyers will always ask to see financial statements prior to entering a purchase agreement, which could include a combination of asset values, income statement, or balance sheet. As well, buyers will need procedures, employee roles, and customer/supplier information for a smooth transition. If you’re the gasoline that’s powering the entire engine, you’ll need it all written down so the business can run without you.
Stage 3: Market
No one knows as much about your business as you do. And even though you will be busy dealing with more pressing matters, it’s important to add the “staging’ and the ‘sizzle’ when marketing your business for sale. While you should remain open to any buyer that comes your way, marketing efforts need to be focused on getting your business in front of the kinds of buyers that are most likely to give you what you want.
Stage 4: Connect
It takes a village to sell a business. It is extremely helpful to have knowledgeable resources like a realtor or business broker or experience advisor on your team, someone who can suggest ways around an impasse during negotiations and point out the small but important details and considerations. Essentially, creating a win /win situation can make the difference between success and failure.
Remember it’s a buyer’s market and if you aren’t ready to accept a reasonable offer you’re better off not listing until ready. Patience is key! If you try to offload your business in a hurry, or without preparing adequately, you won’t realize the return you are hoping for.
Jolynn Green is the Executive Director of Community Futures Central Island who specializes in small business loans. Jolynn can be reached at email@example.com or 250-591-7499