One day you might sell your business.
You’ve probably been planning this all along, using corporate selling as your exit strategy or wealth creation plan. In other cases, the possibility of selling your business could be an accident or even an emotional one.
If you’re in business, you’ve sold a lot.
- You sell gadgets.
- You sell your services.
- You sell potential employees to the company’s idea.
- You have sold the potential of the company to investors.
But are you ready to sell your business successfully?
Here are a few things to keep in mind when preparing to sell your business.
How To Sell Your Business For Millions by Valuetainment
1. Know the Value of Your Business
If you don’t know the value of your business, you will go through the sales process haphazardly. The first logical step to selling a business is to understand what a buyer sees when considering buying a business.
There are three main methods for determining a company’s valuation.
- Asset Approach – Add up all assets and liabilities of the company. What number do you have left? This is a valuation of your company’s assets.
- Income Approach – The income method for valuing a company is a simple approximation of the net present value of a company’s revenue streams. There is a technical method for determining this number, but it is not required for initial calculations.
- Market approach – The corporate market approach involves analyzing similar companies to see what they are worth and/or their selling price.
Choose one of the above methods that give you the best (highest) rating. When you have the average value of your business, you are good to go.
2. Get to Know the Best Brokers in the Industry
Unless you are an experienced broker or M&A consultant, I recommend hiring a broker to help you sell your business. Brokers are invaluable in the later stages of the buying process: negotiations, due diligence, and final sales.
There is a common misconception which rolls around these industries amongst the business owners and even their advisors is that to increase business value approach random but many customers. This concept is rarely possible and has very low return rates.
Therefore, by focusing on little but potential customers with a clear agenda is highly beneficial.
By doing so, the business starts emphasizing the synergies that may be available from the customers and this eventually will help you increase the value and awareness of your brand.
3. Know Your Reasons
Potential buyers will have a lot of questions when they think about buying your business. They want to know the size of the company, the history of the company, the valuation of the company, and any other information you have available.
But a question that always arises is why, why are you selling your business? How you answer this question can make or break a contract. Because the question is an invitation for you to convey the value and attractiveness of your business.
You need to know exactly why you are selling your business and be able to state this reason. If the reasons are “personal” (eg divorce) or obvious (retirement), then you can tell. However, you need to present an encouraging prospect that will sustain buyers’ interest.
4. Know the Right Time
Selling a business depends on timing. The difference between selling your business on time and selling it on time is the difference between a huge loss and an unprecedented surprise.
Timing is the key factor for getting success in selling any business. The motto behind choosing the right time instead of any time is the balance which is maintained by not losing an opportunity for life changing spirit of your business.
However, what is perfect timing? This answer can be different and unsatisfactory for people with different perspectives. It all depends on slowing down and going with the flow of evolution to boost the returns as a whole.
Therefore, look for all ups and downs before stepping in the market. To get best returns, never invest blindly.
Selling business involves big changes in life, big money, and big time. The last thing you need to keep in mind is that selling a business will completely change your life.
But if you are still active in this program, there will still be a big change in how you see work and work with it.
Before you go selling or even start thinking about selling, you should thoroughly understand about your business’s goals and ideas for the future.
This will help you establish a story to sell, which will connect to the potential audience deeply.
Because, selling a business is a big deal. It involves major changes in lifestyle, huge investment of time and money, which one can never get back by pressing rewind.