Selling has become a fact of independent business life. To stay ahead in the selling game you need to prepare now, no matter at what stage your business life is in. The best approach to succeeding at the selling game is to be less of a “seller” and more of a “player”. Here are some tips for keeping the score in your favor:
Let Others Do the Heavy Pitching
Selling a business is an emotional drain. Let professional advisors do the hard work for you. A business intermediary has experience in completing the transaction in a timely manner and at a price and terms acceptable to the seller. Your business broker will also help in structuring the transaction and present and assess offers. If using an attorney, retain one who has experience in the business selling process.
Stay in the Game
You can attend to the day-to-day life of the business with the right advisors on your side. Do not let things slip once the business is officially for sale. Maintain inventory at constant levels, keep normal operating hours, and pay attention to the appearance and general good repair of the premises. These are ways to make the right impression on prospective buyers. Most importantly, tending to the daily running of the business will help ward off deterioration of sales and earnings.
Keep Pricing and Evaluation in the Ballpark
You will want the best possible price for your business. Keep in mind that the marketplace will determine the value of the business. Asking too high a price will drive prospective buyers away.
Play Fair with Confidentiality
Your business broker will constantly emphasize confidentiality to the prospective buyers. They will require signatures on strict confidentiality agreements, use nonspecific descriptions of the business, and screen all prospects. Sometimes they will phase the release of information to match the growing evidence of buyer sincerity. You must also maintain confidentiality in your day-to-day business activities. Never forget that a breach of confidentiality can wreck the deal.
Sell Before Striking Out
Don’t wait until you have to sell. You should plan ahead. Clean up the balance sheet. Settle any litigation. Tackle any environmental problems. Have all pertinent paperwork on-hand, such as the lease and any lease-related documents. You could increase the value of your business by providing audited financial statements for one or two years in advance of selling.
Think Twice Before Retiring Your “Number”
Most sellers assume they will retire after selling the business. Sellers might want to consider staying on in some capacity. Agreeing to stay on in some capacity can actually help get a better price for your business. Many buyers feel that they reduce their risk by having the seller stay aboard.
Keep the Ball Rolling
Once you get an offer, keep the negotiation ball rolling. The right buyer may be better than a higher price. The offer may have a consulting agreement or more cash than you anticipated. Sometimes the structure of the deal is more important than the price. When the ball is rolling, allow it to pick up speed. Too often, deals that drag fail to close.
You can have confidence in being a seller by following these tips, and by working closely with EBIT Associates. We can help you be a winner in the selling game.