One of the biggest mistakes business owners can make when selling their business is trying to do it on their own. Many entrepreneurs have built their business from the ground up through their own hard work, and they think they can sell it with the same mix of determination and smarts.
One of the skills you’ve probably picked up while running your business is recognising when it’s time to call in the experts. Having knowledgeable people on your team can help save you time and money, and in the case of selling your business, it will help you get a better offer. Finding the right team at the start of the process can help you achieve a smooth and successful sale.
Most buyers source their own funding to purchase your business, but financing is becoming harder to get. Banks are tightening their lending criteria and are less willing to make loans based on potential. One solution to this is seller financing. However, if you have a good relationship with your bank, you may be able to offer an alternative solution.
If you add your bank to your selling team, you may be able to design a tailored acquisition finance package for the purchase. The reason you can organise financing when your buyer can’t is because the bank has an existing relationship with you and has a good knowledge of the profits your business makes. This sort of financing option makes your business easier to sell, especially if your buyer has trouble getting a loan.
A good solicitor is essential to the sales process. This is a specialised area of law, so look for someone with experience in commercial contracts and negotiation or a firm with a good reputation for mergers and acquisitions.
Even if your business is relatively small, you don’t want to use the template agreements often found for sale online. These contracts are very general and may have loopholes that can cost you money. Solicitors who are on your team ensure the sales contract is airtight and enforceable. They will also make sure that the final agreement has terms that work for you and not just your buyer.
When you think of bringing an accountant to your team, you’ll likely think of your own accountant. This isn’t a bad impulse – your accountant knows your business almost as well as you do and understands the intricacies of its financial affairs.
However, if your accountant doesn’t have experience in business sales, you may want to bring in someone who regularly prepares businesses for sale. Experts in business sales will know how to normalise your accounts in a way that maximises profits, which leads to a better valuation. They also understand the detail that needs to be provided to prospective buyers when it’s time for due diligence.
The final member of your sales team is your business broker. Good business brokers have the experience you need to sell your business successfully. They know how to market your business while maintaining confidentiality and have a network of qualified buyers ready to purchase. Brokers often do a better job of communicating the value of your business to prospective buyers because they’re able to look at your business objectively. Additionally, they know how to negotiate the best price for you.
A broker can also take on the hard work of selling your business while you concentrate on running it. It’s essential that your business continues to run smoothly during the sales process if you want to get the best price, and this means your focus needs to stay there rather than on finding and negotiating with prospective buyers.
Having the right team behind you can mean the difference between selling your business at a great price and not selling your business at all. Experienced and specialised assistance can relieve some of your stress and bring you the best outcome possible from the sales process.