Are you contemplating making a triumphant exit from your venture? Selling a business can be an intricate and time-consuming endeavor with multiple factors to consider. Nevertheless, with the right strategy and assistance from professionals like Exit Your Way, it is absolutely feasible. In 2021 alone, 8,647 businesses were sold, marking a 14% increase from the previous year. Regardless of your industry and reasons for selling your business, here are effective steps to ensure you sell your business for maximum value.
Identify Your Reasons for Selling Your Business
Potential buyers will likely begin by inquiring about your reasons for selling. Common motives range from retirement and health conditions to partnership disputes. However, reasons such as business difficulty in generating profits or personal burnout can deter prospective buyers. Consider your business’s potential to attract buyers, its readiness for sale, and timing with positive market trends.
Evaluate Your Business
To ensure you don’t overprice or underprice, a business valuation is crucial in determining your business’s worth. Hiring a business valuation expert from Exit Your Way can give you an accurate breakdown of your business’s value and help identify potential obstacles to the sale of your business.
Get Organized and Prepare for the Sale of Your Business
Preparing for the sale of your business should ideally start months, if not years, in advance. This period can be leveraged to enhance your customer base, business team, systems, and financial records, consequently improving your business’s attractiveness to buyers.
Organize all company and financial records in advance, including employee contracts, state and federal tax requirements, needed business licenses, and intellectual property information.
It’s also crucial to rectify anything that might impede or slow down the sale, such as active legal proceedings, approval for ownership changes, or signoff from shareholders.
Hiring a third-party accounting firm to review or audit your financial statements can be beneficial if you suspect any underlying issues. Accuracy in financial information is paramount to securing a deal.
Lastly, draft a business memorandum, detailing your business’s history, financial information, future projections, and an overview of current and future opportunities. Highlight unique qualities that set you apart, like brand recognition, industry advantages, proprietary processes, team strength, and employee engagement.
Consider Whether You Need a Broker
Selling your business yourself could save your broker’s fees. However, working with a broker like Exit Your Way allows you to devote your time to keep your business running optimally during the sale process. A broker can also help you secure the best value as they understand market value and how deals are structured to provide optimal returns.
Find a Great Buyer
Finding the right buyer can be challenging, as a business sale typically takes between six months and two years. Understanding how to reach the right buyer ensures you will attract more prospective buyers.
Ensure you have implemented a process to maintain the confidentiality of your data, as well as a system to track and manage interactions with all potential buyers. Have all potential buyers sign a confidentiality or Non-Disclosure Agreement to protect your business information.
Manage the Diligence and Closing Process
Stay on top of the questions from buyers to avoid delays and loss of interest. Schedule regular calls with your business sale team to ensure all information is provided, and questions are answered promptly.
Be Flexible on the Terms of the Sale
There are many ways to maximize the value you get for your business. An experienced dealmaker can help you navigate the options to give the buyers more of what they desire, resulting in more value for your business.
The Bottom Line
Selling a business is a demanding task regardless of the business size. Once you’ve decided to sell, focus on building your team and preparing your business for a successful sale. Don’t hesitate to seek expert help from Exit Your Way to streamline the process and maximize your returns.
Remember, selling your business is not just a financial decision. It’s also a lifestyle decision, affecting your daily routine, your responsibilities, and your future plans. We are here to support you every step of the way, ensuring you have all the resources needed to make the right decisions.
Exit Your Way also offers an invaluable Business Sale Guide, which provides a detailed overview of the process and challenges you might encounter when selling your business. This guide is a must-read for anyone considering selling their business, get it here.
Moreover, we invite you to explore our Sales Consulting service to understand how we can assist you in not only selling your business but also improving its value in the marketplace. Remember, the key to a successful business sale is preparation, effective marketing, and, most importantly, choosing the right team to guide you. At Exit Your Way, we have the expertise and resources to help you sell your business for the maximum value. Reach out to us today, book a meeting for an initial consultation and let’s plan your successful business exit together.