As a business owner, you are fully aware of all the blood, sweat and tears that went into creating your business. The idea could have started from something as small as a happy hour conversation with friends or something you have been planning since your high school years.
There have been countless hours of pouring over financials, negotiation and looking for staff. It’s safe to say that this business has turned from an idea into your baby.
For some people, the idea of selling their business has never occurred to them. They’ve been more focused on selling certain products than selling the business.
But, this is a road that many businesses cross. It could be because you are looking at starting a new business, wanting to return to the corporate world or simply because you’ve found this is something you don’t want to keep doing.
Whenever you do sell a business, you’ll find the blueprint is a bit more straightforward than starting your business. Still, there are some things you should definitely be avoided when going through the process.
Organising your financials at the Last Minute
There are two big financial parts to selling your business: establishing the business’ value and having your business’ finances all lined up.
Establishing the value can be a bit tougher than say, selling your old TV on Craigslist. First, because many business owners undervalue what their business is actually worth. That would be a disastrous step to take in the whole process. Second, because there is so much to value.
There’s inventory, sales, intangible assets, any debts and much much more. Simply put, you may not have a ton of time on your hands to go through it all and effectively manage it yourself. That’s why many people turn to valuation services to handle this part. They will, of course, charge a fee but the price is well worth the potential hassle.
If you’ve come this far, it’s because you’ve been on top of your finances from day one. Organizing the finances of your business is incredibly important and something you and your accountant will have to go over. Grab all of your financial statements, tax returns and any business loan documents.
Just like buying a used car, potential buyers will want to know everything about what has happened to the business financially since its inception. Having this information handy and ready early on makes your life much easier.
Not having an exit strategy
Even though no one listens, every plane ride starts with the explanation of how to evacuate the plane. It may seem like an utter drag, but it’s completely necessary.
As a business owner, you too need to have an exit strategy. In the vast majority of cases, the business transition isn’t just signing some papers, shaking hands and riding off into the sunset. The buyers may want you to stay on briefly in order to introduce them to customers, explain certain software and have them shown the way of the land.
Not having an exit strategy is simply going to confuse any buyer and drag out the sale for an unnecessary amount of time.
Trying to sell on your own
Amidst planning an exit strategy, organizing your finances, helping determine your business value and continuing to run the business, you’re going to be a busy person. Don’t try and overload yourself by selling on your own. Go and find a professional.
A business broker will do just that. They will help put your business up for sale, scout the market for prospective buyers, communicate with buyers and even look for financing options. Navigating the complicated web of business selling is simply too much for your plate. Do the right thing and find a business broker.
Thinking it’s going to happen fast
Even though there could be plenty of prospective buyers on the market, selling a business takes a long time, up to two years in many cases.
Unless your business is about selling winning lottery tickets, it’s going to take a
