Selling your business: Three steps to a successful exit
If you want to sell a business, you need to make sure that the process is carried out successfully. A well-executed exit strategy can yield huge rewards, both financially and professionally. Here are three key steps to achieve a successful business sale.
1. Prepare your Business
The first step of selling your business is preparing it for sale. This is where you need to look at the things that will make it more attractive to potential buyers, such as improving your financials, decluttering, and clearly understanding the potential buyer’s requirements.
- Financials: You should get a professional to do your bookkeeping and accountancy to bring your financials up to scratch. Clear, accurate financial data is essential to any potential investor.
- Decluttering: Make sure your business is well-organized and up-to-date on any necessary paperwork and filings. Unnecessary clutter around your business and workspace can put off potential buyers.
- Understanding the Buyer: Make sure you do your research and understand what kind of buyer your business is likely to attract. Knowing the buyer’s requirements is essential for a successful sale.
2. Find a Buyer
Now that your business is ready for sale, it is time to find a buyer. Depending on your situation, this could involve looking for a trade buyer, a private investor, or using a broker or intermediary.
- Trade Buyer: If your business is in a particular industry, the most likely buyer may a trade buyer. These buyers are usually in the same industry and are looking to acquire businesses that can help them grow and gain a competitive advantage.
- Private Investor: Private investors may be looking for good investments that they can add value to, beyond just buying the business. If you are looking to keep some involvement post-sale, private investors are often a good option.
- Broker or Intermediary: If you don’t have any potential buyers in the wings, then you may want to enlist the services of a broker or intermediary. They can help you to contact potential buyers and handle negotiation, to ensure you get the best sale price possible.
3. Negotiate & Close the Deal
Once you have found a potential buyer, you will need to negotiate the terms of the sale. This can be a complex and protracted process, so it is important to be patient and work together with the buyer to find an acceptable solution. The most important part is to ensure that you get the best deal possible, while still making sure that the buyer is happy with the purchase.
Once the sale is agreed and contracts are signed, the sale can be made official and you can start the process of ‘closing the deal’. This is where you hand over the business to the buyer and make sure that any outstanding payments and legal matters are handled correctly.
Conclusion
Selling a business can be a complex and challenging task. Following these three steps can help you to make sure that your business sale is successful and yields the best results possible.