Putting your business on the market is a major, and potentially life-changing, decision. Whether you retire, shift to a new opportunity, or just want to hand the company over to someone with more enthusiasm, it can be difficult to let go of something into which you’ve poured much of yourself. These strategies can make the transition easier and increase the odds of a lucrative sale.
Get Your Books in Order
Your financial records must be in the best possible order before you transfer ownership. The new owners must know as much about the business as possible. Moreover, clean books can make your business more attractive as a potential acquisition.
Know How Much Your Company is Worth
An independent third-party appraisal is indispensable. You can’t make a fair deal if you have no idea how much your company is worth. Seek a valuation from a quality third party appraiser who looks at all of your books.
Put Your Potential on Display
Selling a business is a lot like selling a home. Things don’t have to be perfect, but the more curb appeal, the better. Highlight your business’s best attributes, encouraging buyers to think about how they can make the business uniquely theirs. A growth plan can be especially helpful for putting buyers in a growth mindset.
Prepare Your Team
Selling may feel exciting to you, but an ownership transition is a time of significant uncertainty for your team. The new owner may change employment contracts or even let go of some of your staff. Company culture may change. Be upfront with your employees so they can make the best possible decisions for their own future.
It’s important also to ensure that your team can competently run your business in your absence. Businesses that are too dependent on their owners present significant risk to buyers. So ensure you have the right people in place, especially at the management level.
Get Legal Support
Transitioning ownership is a legally complex process that you cannot do on your own. Your in-house counsel may not have the information necessary to navigate the process either, so hire a lawyer who specializes in ownership transitions.
The new owner of your company needs to learn the ropes. They won’t start out the first day fully ready to go, so give them opportunities to shadow you before the transition. This can help them better understand corporate culture and get to know your team. It may also help ease your team’s anxieties about the transition.
Prepare for Transition
The new owner may need some help following the transition, whether it’s with institutional knowledge or practical questions. Be willing to answer these questions for at least a few months following the change. You might have manuals and other documents in place, but there’s no substitute for the years of information you have gained. Consider assembling a list of tips, hard-earned lessons, and other strategies before you go.
Let it Go
It can be tough to watch new people take over something you built. Once you sign the ownership transfer papers, though, it’s time to begin letting go. Having a solid plan in place for what comes next can make this transition a lot easier.