Selling your business for a fair price can be an exhausting undertaking. This can be exhausting and stressful, especially when you’re still trying to keep your business running. You don’t have to be an expert in power dynamics or mind-reading to sell for a high price, though. A few simple tips focus on the basics of a successful business, ensuring your business looks like an enticing investment to the right buyer. To minimize stress while maximizing gains, try these strategies:
- Drive profits higher to the very end. This is the most significant and important predictor of value. Yet many sellers lose sight of it at the moment when it matters most. Strong profits drive interest and excitement, and can encourage your buyer to close the deal faster.
- Keep things confidential. You need to control the narrative and messaging of the sale. That means you need a strong NDA agreement, and a clear plan for when and how to disclose the pending sale to third parties.
- Ensure you are emotionally prepared. Selling a business is stressful. It can also tug at emotional issues you’ve long neglected, such as your concerns about your legacy or your resentment of family members who didn’t pull their weight in the family business. Make sure you’re ready to part with your business, as well as any emotional issues it stirs up.
- Understand that the process takes time. Even with excellent preparation, it usually takes 12 to 18 months to sell a business. Plan ahead and don’t try to rush the process.
- Ensure your business is well prepared. Document operations and systems, and ensure your business can run without you. If your business is too dependent on you, it presents a much higher risk to buyers. Focus also on upgrading technology and infrastructure so that the buyer feels like they’re investing in a company that’s ready to go.
- Talk to family members. If your business if family-run or you want to sell it to loved ones, begin the conversation early. These transactions typically take longer, since you and your family will need time to prepare for the ownership transition. Particularly in family businesses, last-minute deals often fail.
- Get an accurate valuation. An app, a friend, and your own intuition do not count. The most reliable valuations come from people who do this for a living. Don’t be surprised if you’re disappointed by the total value. Indeed, this is often a hallmark of a reliable valuation.
- Be prepared to stick around after closing. Your ongoing involvement after closing increases the chances of successful integration. In some cases, you may need to be involved for up to three to five years. If the initial valuation isn’t what you hope for, you may be able to increase the value of your involvement via an earnout or consulting contract.
- Participate in the process. Don’t just expect the sale to run itself. Be involved in the daily aspects of negotiating the sale, and be prepared to be the face of your company when meeting with prospective buyers.
- Work with a professional. A professional advisor can greatly improve the odds of success by offering insight and experience-backed support. They act as an intermediary, run and guide the sale process, and ensure experienced buyers don’t take advantage of comparatively less experienced sellers.
About Sunbelt Atlanta
At Sunbelt Atlanta, our team is made up of seasoned professionals with more than 60 years collective experience selling companies. Our backgrounds and industry experience are as varied as the companies we represent. Some come from main-street, some from wall-street. Collectively, we have closed more than 500 transactions and the companies we have sold range in size from $50,000 to $25,000,000 in transaction value and span all industries. One thing our professionals have in common is that they all have first-hand experience initiating, negotiating and managing the deal process. We can bring a main-street tenacity to a middle-market transaction and middle-market finesse to a main-street transaction.
There are several ways to take a company to market. There is no, “one-size fits all”. The process we use will depend on a number of factors including; the size of your business, the industry you are in, the lifecycle of that industry, merger and acquisition activity in that industry and your long-term personal goals. We have experts in all major industry verticals on our team and we work with you and your trusted advisors to analyze your company and your industry thoroughly to determine which process is the best process to use to achieve maximum results.