To make a success of selling your business, you need at least two kinds of preparation: 1) getting your enterprise ready for sale, and 2) getting yourself into the right state of mind for the experience.
The process of selling a business that you have spent a lot of time working in that has become a huge part of your life will, of course, be something that will require metal as well as physical preparation. So, let’s consider these points in turn to help you prepare a checklist of essentials.
- Preparing to Sell Your Business
Getting things in order
Getting a professional business valuation is clearly important at an early stage. Whether or not it precedes any other steps will often depend on what time-frame you have in mind. In any event, you will need to get this done by someone who understands your sector so that your valuation method, for instance, is in line with the expectations of your potential buyers.
You will also need to have all your financial records in order. This should be one cornerstone of your sale strategy because these documents will constantly be consulted by your sales team and any keen buyer’s due diligence team. If your preparation is robust and painstaking, this information will support your claims about your business and its state of health. So be sure not to cut any corners or try to bury anything which should be disclosed to a potential new owner.
Fix up the aesthetics
Your business premises should also look fit for purpose. A refurbish and facelift is a good idea, but don’t leave this until the last minute. It’s also important to show evidence of regular repair, replacement and maintenance schedules. Remember this also applies to the digital aspects of your business.
So, as well as your business equipment upgrades, make sure your software also meets current industry expectations. And perhaps most important of all, keep your website up to date. This may be the first thing a buyer will view, so be sure it makes a good first impression.
Not only must your financial paperwork be in order, buyers will also wish to see and understand your business from a legal perspective. This may include items such as staff contracts, supplier contractual arrangements, business licensing, insurances and fire inspections. This may be a burden but put yourself in a buyer’s shoes: Comprehensive documentation will show a business in really good heart, whereas a disorganised preparation will always raise more questions than it answers.
Hopefully, it won’t be a surprise when any buyer asks why you’re selling, but your answer must not only be plausible, it must also be supported by the narrative your paperwork suggests and the responses offered by your sales team. Any discrepancy here may well be exploited by an astute buyer, so this is not an aspect of the sale you should approach too casually.
Get help if you need it
In terms of physical preparation, you should decide how much of the process of selling a business you should take on and how much will be delegated to a professional team. This is an important consideration when the outcome is an important part of your future plans.
And in addition, you must avoid taking your eye off the ball as regards the everyday operation of your business. It’s too easy to get distracted, and in a selling situation the stakes can be high.
- Preparing yourself for the sale
Selling your company is sure to be a life-changing event which you must be ready for. It will be important to remember how and why you came to the decision to move on. Having doubts in the middle of the sale process will leave you vulnerable and is never a good idea.
Ideally, you will have removed yourself from the day-to-day management of your business well before any sale takes place. Not only does this raise the value of your company, it also allows you to plan properly for your future, whatever that may be.
When you are closer to a sale and a final handover, you are bound to feel emotional about the changes. This is natural but, provided your objectives have been clarified beforehand, at least you won’t be thrown into turmoil by indecision or worries about whether you are ‘doing the right thing’.
Remember that you must also discuss matters with your family who will also be affected by your decision. And if you have concerns about how your staff, suppliers and customers will fare under new ownership, be sure to make this part of your own deal expectations at sale time.
By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.