Have you prepared your business for sale? Once you’ve prepared it for sale and determined its fair market value, it’s then time to find a buyer. At this point, you will then need to decide if you’re going to have a business broker represent you or of you’re going to do it yourself? There are pros and cons with each but keep in mind that selling it yourself can give you a lot of gratification if you get what you want and if it doesn’t take too much time away from you continuing to run your business which is a common mistake made. Please note that selling your own business can be difficult as it requires special skills and resources in valuation, advertising, negotiation, and sales. The other major concern that you should have is if word gets out that you are selling your company. Inner company gossip can run rampant which can be a major concern to some of your current employees. Remember, the key to selling your business is not allowing for distractions which could lead to neglecting your business.
When you finally make the decision to sell your business, it should include the following processes:
- Spread the word to family and friends
- Explore your close networks. This could even include competitors, customers or employees that might be interested in purchasing the business. The closer the network could mean the an easier sale.
- Your attorney or accountant might have clients or know people that are interested in purchasing a business due to discussions amongst them.
The next four steps are our top keys to getting the job done (finalize the sale):
In the early stage of this process, maintain as much confidentiality as you can. Use only general terms to advertise your business and don’t divulge your business name in the advertisements. To get this done, there are many different advertising channels to choose from which include:
- Local, state and national newspapers usually have a section labeled classifieds intended for businesses that are looking to sale.
- Email marketing, newsletters, trade journals and specialty publications that relate to your industry could be another place to advertise
Anytime you place ads in the newspaper, trade journal or similar you will probably receive responses that aren’t that genuine. Sometimes, they will just be seeking information, it could be competitors trying to see the legitimacy of the information, sharks who are looking for weak businesses to buy at a much lower price, and those with little or no money or business management experience. If you don’t want to deal with this, use a qualifying process to better understand if the buyer is capable of wasting your valuable time and resources. If anyone wants more information on your business or financial records, make sure they sign a Confidentiality Agreement.
If you’ve found a qualified buyer and they’ve looked over all your information including your financials, chances are they will want to negotiate certain points before accepting the offer. If that is the case, the following should be thought of:
- What are your musts
- What are willing to give up
- At what point will you stop negotiating
Finalizing the sale
Congratulations if you get to this point but if you do make sure you have a professional such as an attorney draft up all the final documents. Make sure you inform the attorney on all the issues you and potential buyer negotiated on as they are vital in the contract. You may even want to prepare a memorandum of understanding with the potential buyer and present this to the attorney for the drafting of the agreement. Many people will look online for contacts today but do yourself a favor and hire a professional to make this part professional and simple because you want to make sure all details are stated correctly and law abiding.