Strategies to Successfully Sell a Business
Strategies to successfully sell a business
These strategies and top tips when selling a business will increase your chances of success. Successfully selling a business requires a lot of preparation, attention to detail and organization. Most sellers badly underestimate both what they need to do and what to do if a qualified buyer comes along. A good rule of thumb is that it takes about ten buyer inquiries to reach a potential buyer who has the qualification to buy the business. There is not a shortage of buyers; there is a shortage of buyers who have the right industry and management, a downpayment and good credit score and the most important ingredient of all, the motivation to move through the process to buy a business. So if you find the right buyer, you need to have you’re “A” game ready.
Here are 5 tips to use when selling a business. Do not forget to prepare and be ready.
1. Assuming you know what the buyer wants.
Buying a business is a unique experience; every transaction is unique. If you meet a buyer with the right qualifications and assume you understand their needs, wants and motivations it is a bad practice as a smart buyer will not reveal their true motivations.
2. Failing to understand the buyer’s objectives and if the business meets their needs.
Assuming you know what the buyer wants is totally different to clearly understanding what the buyer wants to know from you and whether or not this is the right business for them to buy. If you can meet the criteria the buyer gives you…you are on your way even though the criteria may not ultimately be what the buyer says to you.
3. Improper pre-sale planning and lack of organization.
There are so many steps to successfully selling a business. Being organized and having all the right processes in place is a starting point to try and be successful. This includes the legal forms and processes you want a buyer to sign such as a confidentiality agreement, buyers financial statement and buyer disclosure.
4. Answering the question before the buyer asks.
Be careful to understand the question and then provide the right answer. You may be answering a different question than the buyer is asking…and that can be bad or very bad. When you sell a business there can be great value in listening and answering as clearly and honestly as possible all the questions. Too much information provides more questions, not enough information suggests something is being hidden.
5. Allow the buyer to feel a sense of control in the decision making process.
The standard practice is for all parties to try to control the process. After all, if a deal does not eventuate each party feels they lost something even if it’s only their time. Most deals collapse because one party doesn’t understand what or why a question or process needs to happen at different points in the transaction. Trust is one of the hardest components to create.
Selling a business requires a lot of patience, making sure it’s clear what you are selling, organization so you can respond to questions and requests for information while at the same time being alert to only answer questions at the appropriate time.
Are you thinking about selling your business? Would you like to know the value of your business? If you would like more information please visit my website Business valuation.
For more immediate help you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.