Sell Your Business Yourself and Save the Hassle
Selling a business is exciting, but it’s also a time of facing challenges head-on. There are a few key areas you need to understand before you put your business on the market. Once you have a grasp on those essential details, you’ll have no problem implementing a plan that ends in the successful sale of your business.
Determine the Company’s Valuation
The best place to start is by finding out the value of the company so you can make critical decisions. Find a qualified third party to determine your company’s worth and the potential for growth. Investors are buying in because they want to own a growing company. Your CPA or lawyers, or bank can help come up with objectively-based valuations.
Once you know how much the company is worth, it will help you determine the asking price. If you set it entirely too high, you won’t get offers. If you let the firm go for too low of a price, it’s money out of your pocket.
Conduct Due Diligence Before Initiating the Sale
The first thing the companies you’re offering the business to will do is perform due diligence to determine the worth. That’s why it’s worth the effort to do the same type of work yourself beforehand. You’ll know what the company looks like to an outsider, which gives you a ton of insight into completing the sale. If you plan on asking for a premium, you’ll get lots of questions from potential acquirers. Answer them with additional information gleaned from your due diligence and close the sale.
Discover the Power of a Virtual Data Room
Savvy business owners who are listing their companies themselves are tapping into the power of a Virtual Data Room. This high-security, specialized server empowers them to share confidential business documents effortlessly with third parties. That cuts straight through the red tape and makes for a much faster turnover. When selling a business, turnover times are of the utmost importance for all parties involved.
This convenience is why a VDR exceeds the demands of companies in the merger and acquisition space. They use them almost exclusively and will be impressed with any company that does the same. You’ll be able to facilitate all the crucial aspects of the deal, including due diligence using a VDR.
Identify Potential Buyers Before Announcing a Sale
Nobody knows your market better than you. Are there any competitors who would benefit from buying your firm? They may be in the mood to pay a premium because they remove competition and acquire customers. That’s a win-win form them, and they may want to offer a generous settlement just to rid the area of your company!
Naturally, you have to follow security protocols when approaching competitors about a potential exit. It’s a sensitive area, so you may need an NDA in place before getting into the details. However, if you can gauge interest, that means you’ll likely have few problems selling out. Competitors will probably drive the bid higher, which is perfect for you.
Be Prepared to Negotiate
The potential acquirer will likely want to save as much money as possible on the deal. They may even decide to be tough in the negotiations. You must be aware of these possibilities so you can handle them with ease. You may choose to bring an accountant and lawyer with you to manage the negotiations. After all, they’re not as emotional about the company.
It pays to stay professional at all times. With a lot of money at stake, it’s natural to get nervous. However, staying calm and acting like a pro will help bring matters to a successful head. If you don’t like the prices you’re getting, you may always decide to not sell at that time. Only you know the objective in making the sale, so ultimately you hold all the cards.
Embracing technology and being ready to handle a lot of details is what every business owner who plans on selling out their firm needs. With the proper framework in place and a positive attitude, the likelihood is high that a successful deal happens. After all these years of building a business, you now get to reap the rewards.
