When it comes to the sale of a business, there is a lot more to consider than a financial transaction and a signature on the dotted line. The sales process itself can vary wildly in length, from short-term sales of 6 months to long-term sales of up to 12 months or more.
Before deciding to put a business on the market, any owner must consolidate their reasons for doing so, asking themselves why they want to sell up before making any further decisions. There are a variety of reasons why business owners decide to sell their business, these include retirement from work, cashing in on capital, accelerated growth, businesses outgrowing the owner’s skillset or simply moving to a new venture.
There are many steps to take throughout the sales process. We’ve outlined the most important to help you get a head start. If you need help from the professionals, BCMS provide mortgage advice services for businesses looking to sell.
Preparation Is Key
It is never too early to start the preparation process. In fact, you should dedicate at least 3 months to this phase of the operation, doing so will make the process run as smoothly as possible as you can remove any red flags and nasty surprises that may have faced the buyer.
The most important things you need to consider during the preparation process are:
- Identify the USPs of the business that will appeal to a potential buyer.
- Consider recruiting an expert to assist with the legal advice and due diligence.
- Stay focused on the business growth and continue to run the business as if you weren’t going to sell.
- Prepare the paperwork including deeds, intellectual property, contracts, and agreements.
- Do some market research to gain industry intelligence.
Finding the Right Buyer for Your Business
Just as there are a variety of reasons that an owner may want to sell a business, there are many as to why acquirers will want to buy an existing business. An existing business already has an established brand with existing cash flow and revenue, there are benefits of a pre-existing contact list in the sector of the region. Employees have already been trained, there is an existing customer base and buying an existing business removes “barriers to entry”, which is particularly important in a hard-to-enter or specialist market.
In order to ensure you find the right buyer for your business it is important to build up a positive rapport with the prospective buyer and a certain level of trust. You should also enlist a legal representative as selling a business requires the acquisition of an experienced corporate lawyer.
Post-Sale
The post-sale plan of action should start at the beginning of the process. Once the contracts have been exchanged, the former business owner needs the reassurance that their capital and their future is protected and it is, therefore, vital that they establish the cost of their post-sale plans.
The more knowledgeable you are before you take your business to the market, the easier the transaction will be. Why not carry on the conversation using the hashtag #SellSavvy.