Sometimes you reach a point in your life and career that you decide it is time to sell your business. This is never a simple or easy process as you often have a lot of emotional investment with the company as well as the physical and monetary ties.
The rewards of selling your business can be life-changing, and if you are at a point where you want the capital to retire on, start up a new venture, or invest in something else, you need to ensure you go the right way about it.
Not only are there many key practical and financial elements for you to think about, such as the strategy you will adopt, how it will affect your employers, and the price you will ask for it, but it will also completely change the way you live your life.
Here are some important things to consider before you sell your business.
You need to be prepared emotionally
Building a business is something that requires you to invest heavily, both financially and emotionally, and this will stick with you when it comes to selling.
You have likely poured your heart and soul into this business, with many sleepless nights and stressful days ensuring everything is in order.
You would have watched it flourish from a simple idea into a fully-established business and been there to oversee its many successes and milestones over the years.
While selling might be the sensible thing to do, you need to try and keep your emotions out of it and ensure you are emotionally ready to let go, rather than making a quick decision to sell. You need to think it over and ensure it is the right thing for you.
Don’t rush the sale
Once you have decided to sell your business, it can be tempting to sell to the first interested buyer, particularly if you want the money fairly quickly.
Try not to do this, and instead, take your time. It is worth looking to work with an experienced business sale broker to assist with your sale. A broker can help maintain confidentiality with the sale and act as a vital advisor to you at the different stages of selling your business.
They will have done it many times before and know the ins and outs of the process, while also being an external point of view to assist with selling.
Think about why you are selling
When selling your business, you need to think about why you are doing it. Is it, so you have more time to spend with your family? To get the extra revenue for retirement?
Because you fancy a change? Or because you want to maximize your proceeds by selling onto someone new? Think about what your reasons are as you mightn’t need to sell 100%.
You could always seek a financial partner who would allow you to retain part ownership and still be involved but further grow the business.
Or you could step back and be a silent partner, so let someone else run the day-to-day operatives of your company, but the large, final decisions are down to you.
Don’t rush into your sale as you think it is the only option; consider all of your choices and do what is best for you in the long run. You don’t want to sell up completely, then find in six months you regret it!
Consider your plans for after you sell
Selling your company will undoubtedly leave you with a large hole in your life. You need to consider what you will be doing once you have sold. Will you pack up and start a new life somewhere sunny? Will you be moving to a new business?
Will you be taking on new projects? Whatever it is, it is worth putting these plans into motion sooner rather than later, so you have a plan of action to move on to.
Think about getting all your documents together
A potential buyer will want to know the ins and outs of your business before putting in an offer, so you must have all of these documents to hand.
They will likely want to see things such as your last three years of accounts, your business plan, company information, information on your staff (such as their salaries and length of service), why you are selling, and examples of your cash flow.
Get together all the documents and proof you think you might need as if there are too many delays or you look unorganized and unprofessional, they may retract their offer.