How To Get the Deal of a Lifetime When You Sell Your Business
For the majority of business owners, their business is their baby – but the time can come where the right thing to do, the next step, is to sell the company.
It could be because you’re facing financial difficulty; you could be ready to move on and try something new; or it might be that you don’t have the capacity to run the business full time anymore but you want to stay on as a partner. Whatever the reason is, you need to ensure that you are getting the right, and the best, deal you can get for your business. Successfully selling a business is all about seeing your company through the eyes of the buyer, and knowing exactly what they are looking for and figuring out how best to sell them on those points.
Know Your Market
As another item on the ‘things I’ve taught myself in order to run a business’ list, you are going to want to get to grips with the business selling market. See what other companies of a similar size, similar industry, and similar profit margins are selling for. That way, you will know where to begin your price point at. It will also help you to understand when it’s best to put your business on the market; you don’t want the market to be flush with ten companies the same as yours, nor do you want to be the only one there. You want a handful of companies up for sale at once so that there is a slight competition which can drive your price point higher with success.
Think Like a Buyer
The first thing, and sometimes the only thing, that a buyer is interested in is the size of your wallet. They don’t want to know your revenue, because who knows how much of that has to go back into the company. What they want to know is how much money they are going to be able to put into their bank accounts at the end of each quarter. And you’re not going to sell well based on your company’s potential – if you haven’t reached that potential in your time owning the business, then what’s to say that they will? It’s too big of a risk for most buyers. Think like them and you can tailor your pitch to suit what they are interested in.
Honesty is the Best Policy
Take a step back from the Wolf Of Wall Street – business isn’t a game played by liars and cheaters who get away with it because of smarts. You need to be honest about the affairs of your business to any potential buyer. If you aren’t, you could quite easily find yourself being slapped with a lawsuit. If you’re selling because you’re in debt, then tell them; if the company is close to bankruptcy, be honest. Yes, it may harm your asking price, but it could prevent jail time – and that isn’t something to take lightly.
Know Your True Value
You can’t have any delusions going into this sale – you might think that your company is the best thing since sliced bread but, in reality, are you? Is your idea as perfect and unique as you’d like to think? Or is it just another coffee shop? Everything can be given a price, and you need to have no delusions of what your company is worth. Sell a business, sell your knowledge. If you are in possession of the facts and know exactly where you stand, then you can use that to drive a hard bargain and get the price you want. Don’t sell yourself short, and always be prepared to negotiate – but don’t be disillusioned, and don’t underestimate your worth.