Many experts agree that the best time to prepare to sell your business is when you start your business. However, few business owners reach that level of preparedness. Usually, the preparation that goes into selling a business is event-driven. Factors such as problems with a partnership, health issues, burnout, or even divorce can drive a business owner to sell.
Once you decide to sell your business, unexpected events and factors will always arise. In this article, we’ll explore four key questions you should address, to help you prepare for the unexpected, before selling your business.
1. What is the Value of Your Time?
Meeting with prospective buyers can be a serious time sponge. One of the key benefits of working with a merger and acquisition advisor is that an advisor can take some of the pressure off you. He or she can interact with buyers on your behalf.
A large percentage of business owners are also deeply involved in the day-to-day business operations. Business owners don’t have time to meet with every interested party or to weed out the qualified prospects from the window shoppers.
Many business owners want to sell their business to fund their dream retirement, but don’t know where to start.
I’ve used these 5 Critical Questions to help my clients prepare and start increasing their business value.
2. What Do You Want Your Level of Involvement to Be?
Working with prospective buyers is obviously time consuming, but so is knowing every detail about a prospective buyer’s visit. A seasoned business M&A advisor can sift through what information is essential and what information is not. In this way, you only hear about what is relevant and can skip the rest.
It is important for business owners to keep in mind that buyers expect the business will continue to run successfully, not just during the sales process but through closing as well. For this reason, you’ll want to stay as focused on the day-to-day operations of your business as possible. After all, if a deal falls through, the last thing you want is to experience a dip in revenue.
3. Are There Other Decision Makers?
Determining whether there are any other decision makers is a smart move. Part-owners and silent partners will have to be addressed when it comes time to sell.
4. How Important is Confidentiality to You?
Confidentiality is important when it comes to selling your business. The more active your selling process, the greater the chances are that you’ll have a leak if you’re not extremely careful. Leaks unfortunately occur more often than you might think.
How much will this issue negatively impact your business if it does occur? You should have a “leak plan” ready to activate. In your plan, you should have in place what steps you will take to minimize the damage caused by the leak. Being ready to deal with key customers, employees, and distributors is the cornerstone of dealing with any leak. M&A advisors are experts at helping clients maintain confidentiality. This can save you a great deal of time and effort on many fronts.
By answering these four questions fully, you will save yourself time, stress, and effort. Selling a business is a complex process. But with the right preparation you can minimize your effort and maximize your results.