When business owners make the decision to sell, they are taking a giant step that involves emotions as well as the marketplace, each with its own set of complexities. Those sellers who are tempted to undertake the transaction on their own should understand both the process and the emotional environment this process exists within.
The steps outlined below are just some of those required for a successful sale. While they may seem daunting to the do-it-yourselfer, by engaging the help of a business intermediary the seller can feel confident about what is often one the major decisions of a lifetime.
- Set the stage.
What kind of impression will the business make on prospective buyers? The seller may be happy with a weathered sign (the rustic look) or weeds poking up through the pavement (the natural look), but the buyer might only think, “What a mess!” Equally problematic can be improvements planned by the seller that appeal to the seller’s personal sense of aesthetics, but that will do nothing to benefit the sale. Instead of guessing what might make a difference and what might not, sellers would be wise to seek the advice of a merger and acquisitions advisor–a professional with experience in dealing regularly with buyers and with experience in properly setting the business scene.
- Get the record(s) straight.
Although outward appearance does count, what’s inside the books is even more important. Ultimately, a business will sell according to the numbers. The M&A advisor can offer the seller invaluable assistance in the presentation of the financials.
Is your business exit ready?
If you’re planning to exit your company in the near future, you may find EastWind’s Exit Strategy Playbook helpful in developing your own exit strategy, making your company more sellable.
- Weigh price against value.
All sellers naturally want to get the best possible price for their business. However, they also need to be realistic. To determine the best price, an M&A advisor will use industry-tested pricing techniques that include ratios based on sales of similar businesses, as well as historical data on the type of business for sale.
- Market professionally.
Engaging the services of an M&A advisor is the key to the successful marketing of a business. The advisor will prepare a marketing strategy and offer advice about essential marketing tools–everything from a business description to media advertising. Through their professional networks and access to data on prospective buyers, M&A advisors can get the word out about the business far more effectively than any owner could manage on an individual basis.
In order to make an excellent impression on buyers when it comes time to put your business on the market, make sure you properly set the stage, get your financials in order, know what its value is, and market your business professionally. An M&A advisor can work with you to help you achieve these goals and ensure your business will be ready for sale and presented in the best possible light.