Tips for Selling a Business
How to Get the Best Price
When Selling a
Business
Selling a business is the most popular exit strategy for business owners. In some cases, there are no successors who want to continue the business; in others, it was always the business owner's plan to convert the business into liquid assets at a certain point. Whatever the reason you want to sell yours, following these tips for selling a business will help ensure that you get the best price and that your business sells.
1) Sell at the right time for the right reasons.
The most common reason for selling a business is that a business owner falls ill or gets too old to continue to run it - the worst time to be selling a business. For one thing, it's going to be extremely difficult for you to deal with the additional stress of selling a business in those circumstances; for another, the buyer will use your circumstances as leverage against you.
So don't wait until then. The right time is when you're still hale and hearty and have a successful business to sell.
And what are the right reasons? Selling a business is very like selling a house in some respects. When you're selling a house, you don't say that you want to sell because the house is too small. You say that you want to move to be closer to work, for instance. When selling a business, you want to sell because you want to pursue a different opportunity or because you're seeking a different lifestyle (such as retirement).
2) Be clear about what you're selling.
Before selling a business, you need to consider what all the assets of a business are and decide what you are selling. Determine what physical assets you are selling and what other assets you have to sell. Selling a business often includes assets such as good will, trademarks or client lists as well as physical assets. The value of these will depend on their quality. If your business is incorporated, you also need to decide if you are going to sell your business as an asset sale (where you sell everything in the corporation but not the incorporated company itself) or a share sale (where you sell everything including your incorporated company).
3) Determine what your business is actually worth.
Facetiously but truthfully, your business is worth as much as it will fetch in the marketplace. But determining just what that price is the trick. There are
several different business valuation methods ranging from asset-based to future earnings approaches. Of course, no one approach can be used in isolation; the current market, economic trends and what other similar different opportunity or because you're seeking a different lifestyle (such as
retirement).
Good Selling...
How to Get the Best Price
When Selling a
Business
Selling a business is the most popular exit strategy for business owners. In some cases, there are no successors who want to continue the business; in others, it was always the business owner's plan to convert the business into liquid assets at a certain point. Whatever the reason you want to sell yours, following these tips for selling a business will help ensure that you get the best price and that your business sells.
1) Sell at the right time for the right reasons.
The most common reason for selling a business is that a business owner falls ill or gets too old to continue to run it - the worst time to be selling a business. For one thing, it's going to be extremely difficult for you to deal with the additional stress of selling a business in those circumstances; for another, the buyer will use your circumstances as leverage against you.
So don't wait until then. The right time is when you're still hale and hearty and have a successful business to sell.
And what are the right reasons? Selling a business is very like selling a house in some respects. When you're selling a house, you don't say that you want to sell because the house is too small. You say that you want to move to be closer to work, for instance. When selling a business, you want to sell because you want to pursue a different opportunity or because you're seeking a different lifestyle (such as retirement).
2) Be clear about what you're selling.
Before selling a business, you need to consider what all the assets of a business are and decide what you are selling. Determine what physical assets you are selling and what other assets you have to sell. Selling a business often includes assets such as good will, trademarks or client lists as well as physical assets. The value of these will depend on their quality. If your business is incorporated, you also need to decide if you are going to sell your business as an asset sale (where you sell everything in the corporation but not the incorporated company itself) or a share sale (where you sell everything including your incorporated company).
3) Determine what your business is actually worth.
Facetiously but truthfully, your business is worth as much as it will fetch in the marketplace. But determining just what that price is the trick. There are
several different business valuation methods ranging from asset-based to future earnings approaches. Of course, no one approach can be used in isolation; the current market, economic trends and what other similar different opportunity or because you're seeking a different lifestyle (such as
retirement).
Good Selling...
Staying Motivated Against All Odds
We all start our professional lives with enthusiasm. It’s exciting. It’s new. It’s fresh. Maybe there is a little tingling of trepidation too, but it is, ohhh, soooo exciting!
When you start up your business, there is always that rush you get when you put together a plan for your start-up. Building something from the ground up is always exciting and empowering, but what happens when the thrill is gone and problems start?
As a leader, you have a BIG responsibility to a lot of people, even if you are just a one man band:
There will always be times when you feel weak, stressed and small, and you worry about your company’s future, but, against all these odds, you should never lose your motivation.
Since we have all been through rough times, here are some tips that you should always keep at hand and which should keep you going:
Once they see you eager to succeed, no matter how hard it is, your employees will follow your example.
We all start our professional lives with enthusiasm. It’s exciting. It’s new. It’s fresh. Maybe there is a little tingling of trepidation too, but it is, ohhh, soooo exciting!
When you start up your business, there is always that rush you get when you put together a plan for your start-up. Building something from the ground up is always exciting and empowering, but what happens when the thrill is gone and problems start?
As a leader, you have a BIG responsibility to a lot of people, even if you are just a one man band:
- Employees depend on you
- Families depend on you
- Your overall company success depends on your decisions
- You need to think about salaries
- Taxes
- Suppliers
- Debts
- …all done while keeping your stakeholders happy, confident and engaged.
There will always be times when you feel weak, stressed and small, and you worry about your company’s future, but, against all these odds, you should never lose your motivation.
Since we have all been through rough times, here are some tips that you should always keep at hand and which should keep you going:
- Accept the premise that business is a rollercoaster. As industries and economic climates continuously change, you will always have new challenges, and you will be facing a series of ups and downs which are inherent. You will win and you will lose, but never forget that nothing –success, nor failure- is permanent. Prepare for the worst, but plan for the best is well worth living by.
- The sooner you have your first failure in business, the sooner you end up accepting that this is part of the game. Fear of failure is a HUGE issue with entrepreneurs and the mere thought of it makes us amplify it significantly. As a business owner, living in fear is the worst thing you can do, as it very much limits your choices. Once you have your first failure, you realize it is not that hard to move on and gain courage. At the end of the day, what does not kill you will definitely make you stronger.
- Always remember why you got into business to begin with. To prove how important this is, I want to draw your attention to an error we all make: we start business with different goals -defining a career that allows us to use our full creativity and potential, having the luxury of doing what we like to do, building something that is ours, developing a family business that will give your children a starting point in life, making enough money to live peacefully etc. After some time, we get so caught up in work, that our success is defined by the business’ success and we lose track of our priorities. The more we do so, the more unaccomplished we start feeling. This is why you should keep reminding yourself what your objective was and set small targets that you may enjoy along the way. Each day has its small victories – a new client or a job well done for example, so seize them all, as these will give you the strength to work harder and better.
- Assess your business status and identify what you are lacking before it becomes an issue. Do you have issues with marketing, feel like your clients need more from you? In business, as in life, you will never know it all. Don’t be ashamed to ask for help, consult with a specialist and find solutions before it affects your activity.
- Make sure you live a balanced life. As business leaders, we all have the tendency to overwork ourselves – late meetings, late night hours, early mornings, the whole package. We are always checking our emails and staying in touch with everything that happens. The issue is that, when you neglect your personal life and you invest all your energy in your work, you lose perspective. Don’t be afraid to unwind, go on holidays, take care of yourself and spend time with your family. You need a clear head to make the right decisions.
- Read books and articles about some of the great success stories in business – let the power of example motivate you. This will help you see that everyone you look up to failed at some point and give you the power to look forward to challenges!
Once they see you eager to succeed, no matter how hard it is, your employees will follow your example.
