What are the Biggest Challenges When Selling your Business?
Your business may well be the most valuable asset you possess, but when it comes to the time to sell you might find that you are unprepared for the numerous decisions that you will have to make during the process.
But you are not alone, so here we a take a look at some of the common challenges you might face:
It can take longer than you think to sell your business, so preparing your business for sale should begin as early as possible. It must be in an optimal condition to attract the right kind of buyer.
If you are planning to sell for retirement, it’s essential that you plan your exit strategy in good time and don’t let the business slide whilst you dream about your life of leisure.
Firstly, you must now be able to detach yourself from your business so that it can continue to perform efficiently under new management.
Make sure your team is strong, competent, all of your documents are easy to find, your accounts are up to date and that you have done everything you can to rework your business to be a success without you at the helm.
A business that has been prepared for a sale year in advance, is far more attractive to purchasers than one that has been put up for sale at the last minute – and potential buyers can tell.
So, even if you think you won’t be selling your business for years to come, get your house in order. And even if your plans change and you decide not to sell, you will have the satisfaction of seeing your business in optimal condition.
The risks of overvaluing
Valuing your business accurately can be difficult on your own. When you have invested so much time and energy into developing your business, it can be hard to take an objective view of its true worth.
Setting your price too high will discourage potential buyers and you may find that the business does not sell. Eventually, you will have to lower the price, and this will weaken your position.
By taking the time to give your business an honest valuation, you will be able to sell your business far more efficiently. It is also recommended that you gain an outsider’s perspective from a valuation expert to determine the true value of your business.
Finding the right buyer
You may feel that you are never going to find the right buyer. It can be hard to hand your business over to a new owner, so have in mind the type of purchaser that you think will be best for the business; from a personal point of view and also who will be able to set a clear path for the future of the business.
This is also where advice from a professional business broker is invaluable as they can take an objective view and help you achieve the best possible price.
Telling your staff about the sale
You may prefer to keep your plans confidential until the contracts are signed, and this is down to your personal circumstances, but also ensure that you consider how to present the news to your employees and prepare for these beforehand, as unhappy employees can affect the completion of a sale.
By Jo Thornley, Head of Brand and Partnerships at Dynamis
Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and like-minded companies.