14 Jan 5 Strategies to Help You Sell Your Business
Most business owners hope one day to retire with the proceeds from a business sale. But the lack of preparation most owners embrace coupled with the overall low success rate of selling a business can dash these hopes. The following five tips can increase your odds of a successful, lucrative business sale.
You can never begin planning a sale too early. And even if you think you have waited too long, it’s never too late to assemble your plan. You need to anticipate both the financial and emotional aspects of a sale. This ensures buyers can’t exploit knowledge gaps and other vulnerabilities to get a better deal.
Envision Your Next Chapter
Many owners inadvertently tank a sale because they don’t have a clear vision for the future, or for what a successful sale looks like. They can’t imagine life as anything other than a business owner, and so they hold on until the bitter end. You need to begin thinking about what comes next from day one. This can help you look forward to retirement, and is also key to assessing how much money you need to successfully retire.
Arm Yourself With Knowledge
You value your business more than anyone else will. You’ve poured years of hard work into it. But hard work isn’t worth money. Buyers do not understand your legacy, or the value your business holds for you. Before putting your business on the market, you need an outside perspective on the value of your company. Hire an expert to undertake a comprehensive valuation. Consider also performing your own pre-sale due diligence process. This can speed up the sale, and may even increase value by identifying previously undiscovered value drivers.
Surprises are the enemy of a successful business sale. Owners inevitably want to avoid discussing negative issues such as pending litigation and bad reviews, particularly if you have a strategy for dealing with these issues. Buyers may be more skeptical. They’re inherently risk-averse. By identifying potential liabilities in the process, you foster a sense of trust and open communication. You also have time to mitigate these liabilities, and to show the buyer that they can be dealt with and successfully resolved.
Don’t Make it Personal
Selling a business demands that you dig deeply into your business’s finances. You’ll subject your company to outside scrutiny, possibly for the first time. Every decision you’ve ever made may be under the microscope. It’s hard not to take this personally, especially when your identity is deeply embedded in your business. These investigations are not about you; they’re about the buyer’s need to purchase a sound investment. So don’t get defensive, or assume that attacks on your business are a personal attack. Doing so will only undermine your relationship with the buyer and make you look less professional.
One way to weather the emotional storms of a sale without feeling under attack is to hire an M&A advisor. The right expert can handle much of the sale on your behalf, acting as an intermediary who helps minimize stress while freeing your time so you can continue to grow your business.
About Austin Dale Group
Austin Dale Group is a boutique investment banking firm for technology companies. Our clients include software companies, cloud solution providers, and IT managed services – as well as healthcare and other tech-enabled businesses.
We specialize in M&A and strategic growth advisory services for middle-market technology businesses with revenues up to $75 million. We help our clients prepare for a merger or acquisition, build shareholder value, and sell their business (or divest a division). We also work with companies that wish to acquire other companies as part of their growth strategy.