07 Sep Are You Ready to Sell Your Business?
11 things to help you successfully sell a business
If you are thinking about transitioning out of your business, you will benefit significantly by being prepared. Here are a few things to consider as you set your sites on a successful business sale or transition to others.
- Invest time and money getting educated on how to transition your business successfully. Planning to sell your company should include discussing your plans with your loved ones and your team of professionals.
- Clarify your personal, financial, and business goals. Then, take time to define and make sure all three are in alignment.
- Build up your advisory team. Include an attorney, CPA, wealth, financial advisor, exit advisor/business intermediary, spouse or partner, or other significant others. You may also have personal friends, lenders, estate planning attorneys, lawyers, business attorneys, tax specialists, and counselors.
- Create your contingency plan, which should include buy-sell instructions, appropriate insurance, and details of what should happen if something should happen that prevented you from finishing the transition. Reviewed this plan with your advisory teams where applicable.
- Conduct a strategic analysis of your business. Know your strengths and opportunities available for your business.
- Get a business valuation that genuinely conveys what the market is likely to pay you for your business. Be aware the market considers price as well as terms that make the acquisition possible
- Look over your personal and financial well-being as well.
- Consider all your exit options. Identify your optimum deal structure and weigh out the pros and cons of each option. How does each option relate to your goals, need, and objectives?
- Write out your transition plan. Make sure it clearly describes your goals and objectives. Remember SMART – specific, measurable, achievable, relevant, and time-bound. Keep in mind that your plan may end up taking place over a multi-year timeline.
- Consider your plans for life after your sell your business. While your needs to make sense financially, you will be happier if you plan what you do afterward, besides golfing or fishing. Be enthusiastic about your next stage in life and live with deliberate passion.
- Consider what you can do to enhance your business value and give it the best chance of selling. Many factors under your control impact the value of your business. According to the Exit Planning Institute and Forbes magazine, more companies struggle to find the right new owner. As a result, nearly 70% fail to sell, especially without a great plan and realistic expectations.
Take time to think through how you can let your legacy business continue while you enjoy the next adventure in life.
If you would like more information or like to know what your business might sell for in today’s market, please reach out to us.