Selling your business is the biggest deal you are ever going to make – and how well prepared you are will determine the outcome you achieve.
“How do I actually go about selling my business?” is a question I frequently get asked by business owners on a Monday morning after a bad week or weekend.
Before you read this blog, see the initial questions I raised in part 1 of this series – a summary of which are below:
- Is your business ready for sale?
- What sort of seller are you going to be?
- Who will buy your business?
- What are you going to do?
Now address the following queries:
1. Do you have the right people?
- How good is your management team? Can they keep the business growing while you are engaged elsewhere?
- What will happen to the business if you are not engaged for fourteen to twenty four months? – that’s how long the sale process can take.
- What’s in it for the management team and what happens if a sale falls through?
2. Do you know what you don’t know?
- Have you spoken to anyone who has sold their business and asked them, “If you had your time again selling your business what would you do differently and why?”
- How well versed are you in the process of valuing businesses?
- What level of understanding do you have of corporate finance and the structuring of deals?
- What commercial negotiation skills do you have? These are different from sales negotiation skills.
- Are you prepared to spend time and energy acquiring and honing these skills?
3. Do you have the right professional advisors?
- How experienced are you current professional advisers in selling businesses? You can’t afford to let them learn at your expense.
- Which professional advisers have done the most recent deals in your market? Check them out as they will have the best feel for what is going on and how deals are being structured.
- Check previous clients’ / vendors’ experience with the professional team – did they have the client’s or their own interest at heart?
4. Where will you add value?
- Do you want to be an active or passive participant and are your professional advisers happy for you to perform that role?
- Resist the temptation of DIY, the prospective purchasers will be using professionals who will get the best deal for their client and will punish inexperience and any small mistake which invariably is greater than the cost saving.
- Be absolutely clear about your “walk away price”.