Selling your business can be a great deal of work, and you won’t always be in control of everything. However, one thing that you can be in control of is making sure that you have the following 5 things in place before you sell. Read on to find out what they are.
An Exit Strategy
One of the most crucial things you must have in place before selling your business is an exit strategy. This is a plan for how you will sell, and pass your business over to the new owners. It is vital to remember to consider the financial and practical aspects of your exit strategy before you make your sale.
Some of the financial options you may wish to consider are a merger, initial public offerings or even selling to current employees or managers. If none of these are viable then bankruptcy or liquidation may be the correct route.
When it comes to the practical aspect of selling your business, be sure to have a plan laid out as to how you will hand over operations to the new owners. Consider how you will bring them up to speed on operations, and the day-to-day running of the company.
An Experienced Broker
In addition to a solid exit strategy, you will need to find an experienced business brokerage to work with. This is because a valuation from an expert business broker like the ones you will find at https://www.thevantgroup.com/ will help increase trust between you and your buyer. The reason is that such a valuation will not only be more objective than anyone you could make but will also be based on extensive experience in valuing businesses in the sector.
Additionally, a good business brokerage can help you identify any potential issues with your sale before they turn into major problems. This is vitally important because the time and effort invested into finding and negotiating with a buyer is something you can never get back, along with the price they are offering if they back out of the deal at the last minute.
No buyer is going to consider your business unless you have a thorough and up-to-date accounts and paperwork. This is because it’s just too much of a risk for them to buy a business when the details and legalities are unclear.
With that in mind, when you first start thinking about selling your business, make sure your accounts are in order. The best way to do this is to use an accounting software package that allows you to tag different entries with labels like business income, expenses, salaries, etc, as then you can run clear reports that will show the cost vs income for each category.
When it comes to paperwork, you will also need as much documentation that provides evidence that your business is worth what you say it is. Both your broker and your potential buyer will want to see this. Such documents will include monthly profit and loss statements, as well as the deeds to any property or assets, and any tax documentation.
A List Of Key Suppliers
One of the most important pieces of information that someone buying your business will need from you is a list of key suppliers. This means those companies that supply you with vital resources that your business could not do without.
For example, for an office-based business, this may include your network and cyber security provider. While for a manufacturing-based business, raw material supplies, as well as machine engineers are likely to be top of the list.
When providing this list be sure to include all the relevant information your buyer will need including the name and contact details of your primary contact at your supplies, as well as the current unit price that you are paying.
A List Of Critical Employees
Finally, before you sell your business you need to make sure that you have a list of all your critical employees to hand to pass over to your buyer. Indeed, such a list is important for several different reasons.
The first is that if a buyer comes across any problems once the deal has gone through, they can check the list for the name and the role of the best person to help. Secondly, it’s a good idea to include salary information on this list, as then your buyer will be able to get a very fast estimate of the costs involved in employing workers essential to the success of their business.
Lastly, by providing a list of essential workers, you can help the buyer from losing those vital to the running of their new business in the turnaround.