Getting the Most Value from Selling Your Business in 2016
This is Part 3 of 3 in this blog post series about Selling Your Business in 2016. You can find Part 1 here and Part 2 here!
In the previous two posts in this three-part series, we discussed the importance of early and thorough preparation, and the need to start with a realistic understanding of the time involved and the true value of the business you’re hoping to sell in 2016.
In this third part, we want to help you get the very most value out of the sale, because you’ve put so much into your business and you deserve to sell it for what it’s worth and not a penny less.
Go back and re-read the first two articles
Not to waste your time if you’ve already done so, but the points highlighted in the first two articles are absolutely vital to making sure your business sells at its top value. If you haven’t done so already, click the links above to read Parts 1 and 2.
To summarize, here are the main points:
- Starting out with an unbiased and realistic valuation will ensure your emotions don’t cloud the valuation process and will give you a realistic starting point as you prepare the sale.
- Preparing well in advance by getting your business and financial records in order will present your company in the very best light as you meet with prospective buyers.
- Physically cleaning up the premises and equipment will have a psychological impact on the buyer similar to “curb appeal” when buying a home.
- Having a realistic understanding of the time it takes to sell a business successfully will prevent you from rushing the sale and settling for a lower price.
- By setting things up to remove yourself from the day-to-day running of the business prior to the sale, you improve the chances a buyer can see themselves (or a manager of their choice) handling it.
Slow down and take your time
As you know for any business transaction, if you want to come out of it in the best shape financially, you need to approach the negotiation from a position of power. In other words, you can’t expect to get top dollar for your business if your prospective buyer knows you need to sell and it needs to be fast.
Here’s another reason why preparation and a clear understanding of how long the process takes works to your advantage: you’ll be able to approach the sales negotiations realizing you can walk away if the buyer isn’t offering top dollar. And just knowing that in the back of your mind greatly enhances your negotiating power.
Get the right team behind you
No one should go into the sale of their business alone. It’s a complicated process with a lot of moving parts and it’s very easy to get overwhelmed if you’re trying to handle it all. The chances of your doing so and managing to negotiate the maximum value sale for your business are all but nonexistent.
Instead, as early in the process as possible, bring on a lawyer, an accountant, a commercial real estate broker, and a business broker who are experienced in setting up business sales in your area and in your industry. Work closely with these partners and benefit from their experience. Don’t relinquish control, of course, this is still your business and your financial future being decided. But don’t ignore good advice just to feel like you’re still the boss either.
Although you will be paying these professionals a fee for their services, the amount they’re likely to add to the final sale price of your business through their expert advice and fast, efficient handling of the process should more than cover their cost. Plus, there’s no way you can put a dollar amount on the peace of mind their help with buy you.
So there you have it: your 3-part guide to Selling Your Business in 2016.
For more specific tips on how to effectively sell your business, read our free white paper, How to Sell a Business, A Step-by-step Guide.
