Successfully exiting from your business can prove just as difficult as running it - that’s why we’ve decided to share some words of wisdom from our years of experience with the process. As our name suggests, selling businesses has been our area of expertise for longer than we’d care to admit, so if you’re considering selling your business in 2018 then the tips below will help you to lay the groundwork for a successful sale.
The first key step is preparing your business for sale. Although this may seem obvious, many business owners, fail to execute this step correctly, due to over familiarity with their company. Preparation for sale requires organizational skills and hours of dedicated work. It entails organizing all documentation pertaining to your business, including financial statements, preparing a valuation (stb can help here) on your company, and doing other cleanup and organizational work before you put your company on the market. Preparation is critical to lowering sellers’ stress levels and thus increases the likelihood of a successful sale.
It is essential to know what your turnover is, how much turnover is generated from management income rather than one-off fees and how much your profit is. Without accurate figures separated into different categories of income potential buyers may be deterred. It is crucial to verify the accuracy of this information. Should the buyer discover a discrepancy your credibility will be damaged and worse still the sale could be jeopardised entirely.
Marketing only becomes a concern when your business is fully prepared for sale. At this point we can actively market your business on site, across social channels & via our newsletter. We have the knowledge & experience required to market your business appropriately and hold preliminary conversations with buyers. We will adhere to the marketing strategy developed during the preparatory stage.
2. Persistence and Patience
Selling a business is regarded as one of the most stressful events in one’s career. As outlined above, it requires staggering amounts of preparation and demands a lot of dedication and follow-through. The process is often beset by setbacks, frustrations, and disappointments. Sellers who don’t receive a prompt offer are apt to feel discouraged. This is why patience is a key attribute for sellers.
Being patient and letting us do our job is important. Maintain your focus on your business. Letting yourself get consumed by the sales process, at the expense of your business revenues let the revenues will kill the prospect of a sale faster than anything else. Because the process of advertising your business online, screening buyers and presenting these buyers information on your business is passive, patience from sellers is paramount.
It is vital to answer questions promptly and in full. Once an interested buyer has been found sellers must be ready to answer increasingly more detailed questions about their business, particularly those that were not addressed in the offering memorandum.
In advance of committing to a meeting, buyers tend to ask detailed questions about the accounts and how the turnover of the business is made up.
Typically, prospective buyers want to follow through the information given on the marketing information pack and double check that this aligns with the accounts and with the property records shown in the property management system. The onus is on the seller to explain any inconsistencies that are unearthed.
Naturally, buyers will be repelled if they do not get swift, satisfactory answers to their questions.
4. Take Care When Considering Offers
The best way to compare offers properly is to insist that they are set out in detail and in writing. The headline price is not the only factor worthy of consideration. Other information can often determine which offer is most desirable. For example, how much of the price will be paid upfront and how much will be deferred? The terms of the deferment also need to be borne in mind.
5. Hire an Experienced Solicitor.
Engaging the services of a solicitor with experience in this area will increase your chances of bringing the sale through to a successful completion first time. A high proportion of business sales go awry. It is advisable to choose someone who specialises in commercial law and who will agree to a fixed fee. We can make recommendations upon request.
To learn more about how our team can help you sell your business in 2018 please don’t hesitate to contact us.