Maintain efficient operations while brokerage professionals sell your firm. Distracted sellers often forget details that lead to material changes in the target companies operations and financials. When things change, buyers get nervous. Maintain the property. Maintain inventories and operation hours. Create a management layer that reduces keyman concentration. Sales and earnings declines will alert purchasers and can kill transactions.
Business brokers and M&A experts will assist with many sales process elements. They’ll stay focused on the sale process so you can stay focused on operations of your business. Transaction attorneys (not just any attorney) and CPAs are also helpful.
You may have a predetermined value for your firm and how much you expect to make when you sell. However, t he market determines what you get. Getting an expert valuation before setting a price is crucial. If you overprice your business, sophisticated buyers won’t even inquire and those unsophisticated won’t be able to acquire financing. If you under price it you are leaving money on the table.
Maintain strict anonymity until your sale is finalized. If your vendors and staff know you are selling, it could hurt your business. Key staff may leave and vendors may cancel contracts. Bankers may cancel lines of credit. Confidentiality is the number one stated concern of business sellers.
Will you continue in the business past the transition period? This choice often boosts corporate value. Buyers pay more when a seller stays on for a set term since it reduces risk. Seller financing? This shows buyers that you believe in the business’s future. Note that the SBA does not allow sellers to remain involved longer than twelve months.
Preparing without pressure is preferable. Life could force you to sell at any time. That’s why many sellers start preparing years in advance by cleaning up paperwork, managing lawsuits and environmental issues, and organizing papers. This often has a favorable impact on the profitability of the company as well.
Selling a business can be quite distracting. Most consult a business broker or M&A advisor. Business owners should start talking to brokers years in advance. So they can maximize value. If an M&A Advisor doesn’t want to invest the time in learning about you and your business goals years in advance – find another advisor. Experienced advisors would rather nurture a business until it’s the right time to sell – not just take anything to market quickly to make a fast buck.