Selling a business is a lot more complicated than selling a house or a car. There’s a lot of people and a lot of documents involved in the process. The worst thing you can do is walk in underprepared and overwhelmed at the prospect of seeing the process through to the end. The more you have together ahead of time, the easier it will be to sell your business in the smoothest way possible.
Buyers are always interested in why the seller has chosen to sell a business. They want to know it’s not because the business is in trouble or that something catastrophic has happened. Some people sell for reasons that have nothing to do with their business – maybe they want to move away, or their interests have drastically changed since the business started. Expect to be asked why, and practice putting that answer into clear terms. You’ll want to know what to say, especially if the reasons are personal.
Don’t make the mistake of believing that revenue is what’s most impressive. If your revenue is large, and your expenses are also large, you aren’t going to be turning that much of a profit. Most buyers are looking for highly profitable opportunities, and revenue means much less to them than what the business actually banks at the end of the month. Update your figures on your profits. If you plan to sell in the future, it may be worth taking small steps to maximize your profits. Your business will appear more attractive when the time comes.
The person buying your business won’t see it for its sentimental value or its potential. Sadly, it won’t matter to them how much time or money you’ve invested into the business. They’re only interested in objective valuations. If your business is based on the internet, it might not be as easy to figure out what it’s worth. If that’s the case, you can use a tool like Digital Exits to get a valuation done.
Of course your business isn’t absolutely perfect. No buyer can reasonably expect that they’re getting a great deal on the world’s best business. Make sure you tell any potential buyers where the kinks are. What can be improved? What are the biggest issues you’ve faced in the past? Are there any problems that you haven’t been able to implement a long term solution for? If you hide these things, potential buyers are going to run away. It looks suspicious to dance around the truth – especially when most buyers were already prepared to handle a few little setbacks within your business.
When you’re already burned out and frustrated, it’s not the best time to sell. You aren’t thinking clearly, and you might actually regret selling your business once you’ve calmed down. You won’t be able to take anything back. Make sure you feel right about selling before you do it. Approach the situation with a clear head and a lot of patience. Selling your business can sometimes be equally as complicated as running it, so you need to make sure you’re selling when the time is right.
Don’t be discouraged if your business doesn’t sell right away. These things take time, and you shouldn’t feel pressured to accept an extraordinarily low offer just because you’ve been waiting a while. Just keep your chin up and move along as usual until the sale is completed.
Having background in communications and management, Amber often writes about small business and budding entrepreneurs. When not working, you can find her online chatting with her friends or reading industry blogs. Connect with her on Twitter.