Planning to Sell Your Business? - Know the Steps to Ensuring a Successful Outcome
At the risk of oversimplifying the very complex process of selling a business, by taking the time to thoroughly address each of the issues previously outlined, you will significantly enhance your chances of a successful outcome.
Steps to ensuring a successful business sale outcome:
- Know the real reason why you want to sell.
- Be clear about your motivations as this will dictate the sale process.
- Honestly assess whether you are really ready to sell - seller’s regret can dampen any outcome.
- Clearly define and prioritize your sale objectives.
- Develop an exit strategy with specific goals and milestones.
- Have a solid post sale personal financial plan.
- Evaluate the saleability of your business through the eyes of a buyer (Would you buy your business?)
- Make yourself expendable.
- Determine how much your business is worth in the market.
- Understand the different approaches to valuing your business.
- Have your business valued by a certified valuation specialist
- Take steps now to increase the value of your business.
- Explore ways to increase cash flow, increase revenue, and increase operational efficiency.
- Get your house in order.
- Consider the interests of all stakeholders
- Will all family members get on board?
- Identify any stakeholder who can say “no” to a deal.
- Anticipate how your management and employees will react.
- Educate yourself about the sale process.
- Focus on maintaining confidentiality throughout the process.
- Have a plan for how and when you communicate the plan to your employees.
- Begin forming your business sale advisory team.
- Evaluate your existing advisors’ capacity to guide you through the business sale process.
- Have your advisory team in place before you begin the sale process:
- A business intermediary who works exclusively on your behalf
- An attorney experienced in business transactions
- An accountant experienced in business transactions
- A wealth manager who can work in collaboration with a team of advisors
- Have a clear plan in place to manage your business during the sale process
- Run your business as if you are not going to sell it - because you might not.
That brings us to this tenth step, which is to be very clear on the essential steps to ensure a successful outcome. Essentially, this checklist should form the blueprint for your business sale plan, which should be developed further by your team of advisors.