If you have reached the decision point to sell your business, it is important to take several steps to maximize the value of your business when it is presented to prospective buyers. No business exists that is ready to sell the moment this decision is made. However, if you review these steps and make routine efforts to keep your business sale-ready, it will be easier to sell when the time comes. Let’s review these steps:
Gather Critical Business Information
Buyers need a clear understanding of your business, including financial and other sensitive information. You can’t wing it when it comes to presenting the details of your business, so take the time to gather information such as:
- Equipment, inventory, financials, assets and debts, descriptions of your facilities, insurance information, cash flow
- Digital business systems and equipment, technology you own or use, your social media presence
- Customer lists, details of employees and their responsibilities
- Description of competitors, your business strengths, and weaknesses, opportunities for growth
- Any franchise or vendor agreements
Improve the Look and Feel of Your Business
Curb appeal often describes how your business looks to customers, but it also applies to how the business looks to buyers. First impressions can often make or break a business deal; if a buyer feels the visual does not match the business description it can raise flags to them. Make sure your business is clean, the employees are well trained, and you are immersed in the management of the business. Buyers should be pleased by the curb appeal as much as any customers.
Get Ready to Negotiate
A business owner loves what they do, or they wouldn’t have stayed in business for many years. Unfortunately, this can cause problems during negotiations because owners become emotional when buyers ask questions that make them uncomfortable or imply the business has less value. Buyers will walk away from business negotiations that become contentious, emotional or contain any surprises such as undisclosed financials or other issues. Sellers should stay objective and understand that buyers will ask questions that may bother them but are well within their rights to ask.
Prepare For Due Diligence
Part of the business sale process is due diligence. During this time the seller will be asked numerous questions and be asked for numerous documents regarding the business. If a seller has done their preparatory homework this process may not be onerous, but be prepared and respond promptly to information requests.
Continue to Run Your Business
Even though you are selling your business, you can’t afford to stop running it. It’s important to keep your business operating in good order, just as though you planned to keep it and not sell. Buyers expect to see a thriving business during the sales process and can be turned away if the seller acts like the business is already sold. Stay engaged and show you have a strong business for sale.
And most important —
Don’t try to sell your business alone. Hallmark Business Brokers has years of experience connecting sellers and buyers. We will help you through all the steps above, present your business to qualified buyers, and continue to work with you through due diligence and negotiations. This will free up your time to continue running your business and keep it in top condition for your buyers. If you are ready to sell your business, contact Hallmark Business Brokers today.