Selling a business isn’t like selling any other kind of product. Not only do you need to find a buyer and negotiate terms, you also need to figure out how to put a dollar sign on your inventory, staff, marketing and brand.
While the sale of a business can be the beginning of an exciting new chapter in your life and career, getting the most out of that sale is by no means a straightforward proposition. If you want to take the next steps but aren’t quite sure what they are, here is a short explainer to help you figure out how to start.
Before you can start trying to sell your business, you need to figure out how much it’s worth. This is not always a straightforward process. Business valuation takes into account a number of considerations — after all, your business is more than just a sum of its assets. For this reason, many business owners get help from professionals to figure out the market value of their companies.
Once you know how much your company is worth, it’s time to start marketing it. The marketing stage may simply involve reaching out to interested parties and advertising your plan to divest, but some companies may also choose to make strategic short-term investments in their businesses to make them more appealing to buyers.
3. Buyer Screening
When it comes to managing the actual sale, things can become a little more complicated. Finding willing buyers is not always enough, and owners who have spent years building up their company may not want to consider selling to just anyone.
For this reason, you may want to consider working with a mergers and acquisitions advisor like beaconadvisors.com to help you find the right buyer and broker the sale.
4. Negotiating Terms
When selling a company, you should expect some back and forth — even with a dream buyer. Settling on terms that will be agreeable to both parties can take some time, and it’s important to enter the negotiation phase with a strong sense of what you are willing to be flexible on.
One of the benefits of handling the divestiture with the help of a broker is having the kind of expert advice that can help you maximize what you get out of the transaction.
Once terms have been agreed upon, the divestiture can go forward and the transaction can be completed. When done right, closing is a smooth process. But from time to time there can be issues, so make sure you wait until the last of the paperwork has been formalized before starting your celebration.
Selling a business is a milestone in any entrepreneur’s life, and whether you’ll be leaving behind a company you’ve invested decades of work into or divesting yourself from a start-up so you can move on to the next exciting venture, you want to make sure you’re getting as much value as possible from the transaction.
Following these five steps — and bringing on expert advisors who can help you handle the process during the critical phases — is the best way to make this happen.