In my last post, I mentioned that selling your business to an outside (3rd) party may be the best way to maximize the cash you will receive from your privately held business.
That is true, but to get the most for your company, you the process needs to be managed well. While each selling process is unique and different, there are some commonalities.
Here are some tips that will, hopefully, help the sale of your business go more smoothly.
- Understand your business value. Be realistic. One of the greatest impediments to companies actually selling is that the seller has unrealistic expectations as to the actual value of their business. The best way to do this is to work with an independent valuation expert – and not just a business broker or investment banker. But know that the business will ultimately be sold for whatever a specific buyer is willing to pay for it, under the circumstances and requirements of that specific buyer.
- Only spend your time and negotiate with potential buyers who can actually buy the company. Buying a company takes not just capital, but know-how. But maybe most importantly, the buyer needs to be motivated.
- Keep things moving forward. Don’t let the process lag or slow down. That is the kiss of death in getting the deal done. Keep the energy positive and moving ahead.
- Keep it simple. Complex deals have a harder time to close than do simple ones.
- Understand that selling a company is an emotional experience. The owner has put their time, effort, and emotional capital into building the business. Price is not the only factor in getting a deal done. As a seller, know what you are looking for and need beyond price.
- There are often three elements in a selling situation: value, speed, and confidentiality. You can close a deal if two of these elements are precisely right – focus on the top two. But it is best to have all three elements in place.
