You have worked hard to build up your small business and now the time has come to put it into the hands of a new owner who will able to further compound its success.
This can be an emotional time for you as you prepare to wave goodbye to an idea that you have plugged a lot of time and effort into.
Still, selling a small business can also provide great satisfaction, and hopefully profits, but ensuring the process goes through smoothly is paramount to preventing it from becoming too costly.
Here are our top tips on how to sell a business smoothly and successfully.
1. Plan early
The first step for selling a small business is planning early. Securing a buyer and processing the transaction can take months or years, so you need to ensure that time is on your side.
2. Get it in writing
A business sale agreement is an ideal document that will help you outline the main details of the transaction, such as what assets are to be transferred and the amount to be paid for the business.
It is worth nothing that this business contract template applies to the sale of a small business, which is not a limited company, or the sale of assets held by a limited company.
3. Have a price in mind
It’s a good idea to have an approximate price tag in mind when selling your business as this gives you and the potential buyer a number to negotiate around.
Put a negotiator between you and the buyer to thrash out the figures as this will prevent the relationship from turning sour if a problem or conflict occurs.
4. Get organised to avoid delays
When approached by a potential buyer, ensure that they are serious about the transaction, as timewasters will cost you money.
You don’t want the sales process to carry on longer than it has to, so make sure all the necessary arrangements are in place to avoid delays. This not only cuts costs, but it helps to prevent frustrations arising on both the buyer and seller’s side.
5. Get the right advisers
You will also need advisers to direct you on the right course of action for the sale. These can be brought in at a later stage, but you must ensure that they have strong experience and knowledge on selling a business.
6. Understand the market
It’s paramount that you as a business owner understand the market for your business to be able to identify the most appropriate buyer.
In addition to this, it’s a good idea to make you business well-known in the industry ahead of the sale, which can be done through better engagement with trade bodies, for example.
7. Reveal details slowly
No one would suggest you to pull the wool over your buyer’s eyes, but that doesn’t mean you need to disclose every failure from the word “go”.
As the relationship between you and the buyer grows, you can begin pointing out some of the negatives, as well as the positives, of your business.
8. Sell at the right time
A great way to highlight the success of your business is to make sure profits are roaring near the time you decide to sell it – after all, this tells buyers they are investing in something that is already a success.
When selling your business, get the sale in writing by downloading Lawpack’s solicitor-drafted Business Sale Agreement, which outlines the details to be included in the sale.
Published on: July 4, 2012