How to get the best deal when you sell your business
- Place a reasonable price on your business. An inflated figure either turns off or slows down potential buyers, rely on your business broker to help you arrive at the best ‘’win-win” price.
- Carry on ‘business as usual’. Don’t become so obsessed with the transaction that your attention wavers from day today demands – affecting sales, costs, and profits. Since the selling process could take as long as a year, the buyer needs to keep seeing a healthy business.
- Engage experts to ensure confidentiality. A breach of confidentiality surrounding the sale of a business can change the course of the transaction. Expert intermediaries can channel the process and the parties involved to keep the sale within safely silent bounds.
- Prepare for the sale well in advance. Be sure your records are complete for at least several years and do all pertinent legal or accounting ‘’house cleaning’’ … as well is a little sprucing up of the plant, office, or shop.
- Anticipate information the potential buyer will want. In order to obtain financing, the buyer will need valuation appraisals of assets, as well as information to satisfy environmental and other regulations.
- Achieve leverage through buyer competition. This can be tricky. You would be wise to let your business broker, if you have one, create a competitive situation with buyers, as a third party, to position you better in the deal.
- Be flexible. Don’t be the kind of seller who wants all cash at the closing, or who won’t accept any contingent payments, or an asset transaction. Again, if you have one, depend on the advice of your broker – especially the knowledge of financing and tax implications – to keep the deal sweet.
- Negotiate … don’t ‘’dominate’’. You are used to being your own boss, but be prepared to learn that the buyer may be used to having his or her own way, too. Decide ahead of time what ‘’to hold’’ and what ‘’to fold’’.
- Keep time from dragging down the deal. To keep the momentum up, work with your intermediary to be sure the potential buyers stay on a time schedule and that offers move in a timely fashion.
- Be willing to stay involved. Even if you’re feeling burnt out, realise that the buyer may want you to stay within arm’s reach for a while.