What To Expect When Selling Your Company
Selling your company is very complicated and demanding of your time. David Lonsdale in an Inc.com article provides some tips on how to go about this difficult process. He says the seller or business owner should be patient and remain focused in running the business. How can the seller do this? Hire experienced professionals such as a business broker, lawyer and accountant to help you sell the business. Be ready with your business and financial records. Put a reasonable price tag on your business. In the meantime, run your business well and profitably. A business with sound cash flow commands a better price and a stronger negotiating position for the seller.
Here are seven scenarios that you might not be expecting – and the reasons that they’re not the end of the world.
- You’ll get burned out, so know why you’re selling. The sales process usually takes from nine months to a year, so it’s normal to get frustrated partway through. Keeping your motivation clear will help you stay focused on the ultimate goal.
- This isn’t your specialty, so hire professionals. Selling is a specialized process. You’ll only sell your company once, and you owe it to yourself to use expert intermediaries who have done this many times before.
- You’ll think the deal is dead. My partner likes to joke, “Every deal dies three times before it successfully closes.” There’s a grain of truth to that.
- Accountants need numbers to survive. You will be overwhelmed by an unending stream of demands for more and more financial information.
- Lawyers start every sentence with, “The problem is…” Remember, you’re paying them to protect you, so they’re supposed to keep finding possible problems. Your job is to stay positive and keep pushing towards the solutions.
- You’re not IBM. If your asking price is more than the value of the best public company in the industry, you may be a little unrealistic.
- Don’t forget to run your company! This is the biggest sale of your lifetime. It’s quite likely that the most important business decision you ever make will be when and how to sell your company. Once it gets rolling, the sales process will seem to suck up all your time and energy, and you’re going to want to focus on it. But if profits drop, so will the value of the company and your negotiating strength. Take the time to keep the business running smoothly. That’ll make your company the kind of growing enterprise for which buyers will pay a premium. …
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