Planning to Sell A Business - Step 1
Each sale of a business is unique, yet there are steps that are common and it's important to be familiar with them to maximize your sales value. This is the first of four posts that will touch on several.
Step 1 - Planning
The best way to get where you want to go is to know where you are going. These preliminary considerations will help you focus and save time and energy.
Many sellers skip this basic step. Your objectives should include far more than simply getting the best price for your company. Do you want to stay with the company or exit? How will you spend your time during and after the sale? What is your next project or passion? How do you want the sale to affect your employees, your business partners, your family? After you list many objectives, take time to rank them in terms of importance. Often, intangibles will surprisingly rank high on your list.
Understanding Your Company Relative to the Market
A thorough competitive analysis includes more than just a list of names that compete for your customers. Your market is often affected by complimentary products and services, large economic trends, changes in preferences or technology. Many of these indirect factors greatly influence how desirable your company will be to a buyer who might be looking at several industries with different trends.
Other Aspects of a Great Plan
The most important aspect of a great plan is time. I tell sellers to begin preparing for a sale two years before they expect to sell. Professionals will tell you it takes an average of 6 to 9 months for a smooth deal to consummate. Now is the time to start organizing information, keeping better records, and gearing up for a successful sale. Also, the best plan is crafted with the help of a great team. Know who you will have on your team, or whether you will play multiple roles on your own. Each role you play takes away from your time running and growing your business. For each role you place in other hands, clearly define the objectives and the means of communicating progress toward those objectives.
What They Don't Tell You - Personal and Emotional Considerations
Often, the most difficult part of a transaction is the stress of change. Owners who do not acknowledge the impact of this significant life change affect deals in ways that make progress difficult. Have a plan for yourself during and after the deal closes. If you are not excited about the next phase of your life, you will likely not be excited about moving the sale of you company to conclusion.
Do you need help planning? More detail on any of these topics can be found in Steps to Selling Your Business whitepaper, or SCHEDULE a free consultation.