Selling a business poses challenges for even the savviest of entrepreneurs. There’s no single correct path to selling your company, but there are universal pitfalls that can be avoided with planning and foresight. Selling a business requires an extremely specific type of buyer that is willing to take on the risk of ownership in your company. This article details important points to consider before selling your business so you can set yourself up for success.
Know your motivations and goals
Before you can sell your business, you need to know what you want to do next. Start by making a list of your goals — both professional and personal. Think about how selling your business could affect your lifestyle and your future. Once you know what you’re looking for, you’re more likely to find a good fit for your business.
Conduct market research
Research prospective buyers to understand their motivations and objectives. You may be surprised to find that the buyers you’re targeting aren’t necessarily interested in your industry. You can also use this information to refine your asking price and determine the best way to approach buyers.
Determine the value of your business
A business valuation is critical when selling a company. A valuation is an estimate of a company’s worth. The process of determining your company’s value can be a challenge, but it’s essential to selling your business. The value of a company is determined by a number of factors, including the current market landscape, your business model, and its financials. You can get a general idea of the value of your business with some simple math. There are also a number of online tools that can help you determine a more precise value.
Establish your asking price
Setting the asking price for your business is one of the most important aspects of the sale. It’s impossible to predict exactly what the price for your company will be, but you can determine a range that is reasonable based on the industry and your company’s value.
Identify prospective buyers
You may already have a shortlist of prospective buyers you would like to sell to, but if not, now is the time to look for them. The ideal buyer for your business is someone who has the same core values and vision for the company that you have. Even if you aren’t sure what type of business you want to own next, you can still find the right buyer for your company. Use your research to identify potential buyers to approach and make sure you’re targeting the right people.
Set a meeting agenda
A prospective buyer may want to meet with you to learn more about your company, but you’ll want to use the meeting as an opportunity to learn more about them as well. Before the meeting, create a list of questions you want to ask the buyer. This will help you better understand the buyer’s motivations and goals when selling the business.
A successful sale is about more than the numbers. In order to break the highest amount, you’ll need an effective sales strategy. Start by mapping out your sales plan to keep you on track. By following these points, you’ll be well-prepared to sell your company.