If you are planning to sell your business soon, you may be wondering: how do I evaluate and market my business sale? There are some very specific things that you will need to prepare in advance. First, you’ll need to put your financials in order, perform due diligence on the current market as well, to get an accurate and precise valuation of your business. It also helps to understand the true profitability of your business.
Preparations allow you to:
- Streamline the sales process
- Package your business so that it is attractive to prospective buyers
- Get the best sale price
Failing to prepare for the sale of your business can lead to dire consequences. Poor planning, for instance, may mean a suboptimal sales price and unfavorable conditions. So you want to start the process early. Of course, you may close a sale in far less time, but preparations ensure you stay in control.
Again, it is crucial to do a thorough evaluation before putting your business up for sale. So, take some time to figure out things like your readiness to let go of the business, who your potential buyers are and your exit strategy. You also want to have answers to the following questions before putting up your business for sale:
What’s the value of my business?
It is almost impossible to be objective about how much your business is worth. Many aspects put a dollar value on a business, some which you may not know about. Business valuation boils down to expertise. A professional valuation will provide an accurate estimate of your business value, and better prepare you to vet potential customers. It will also reassure buyers that the value is based on specific, measurable criteria instead of wishful thinking.
What might a prospect find when they go digging?
An intelligent buyer will always look for a verifiable history of financial success. They will want a solid record to uncover any outside economic factors or seasonal trends that affect the business. They will also need the records to predict staff needs, profit growth, other crucial considerations, etc. So you want to ensure that all these details are in order. Don’t forget deal-breaking areas like accounting, company ownership, trademarks and intellectual property rights that may interfere with a sale.
How will I maintain confidentiality?
It might be disastrous if word about the sale of your business leaks too soon. Employees may leave. Competitors may take advantage of the situation to hit the market or even pose as potential buyers to gain access to critical data. A business broker can be a great help here, as they will (with the help of a lawyer) come up with a non-disclosure agreement to protect your confidentiality.
Can I substantiate my forecasts?
Your projections and claims are meaningless unless you can prove them. So, you need evidence in place to help you back up the predictions about your business.
Is the market right? The answer varies depending on what type of business you have and what services you offer.
Look at current market conditions for your industry before selling. Don’t sell until the conditions are favorable to sell. Still, on timing, you shouldn’t wait until your business is on the decline to sell. Instead, present to buyers when the business is thriving.
How do I market my business sale?
When the time to sell your business comes, you’ll likely experience a mix of uncertainty and excitement. This doesn’t mean you aren’t ready for the transition. But you’ll still have to reflect on whether it is the right decision for you and your company. As we’ve discussed, you won’t figure out if your business is ready to sell, how the buyer will value your business and the right time to sell. It’s equally important to know why you are selling the business in the first place.
Once that’s out of the way, here is a quick guide on how to market your business for sale.
Hire a business broker
A good broker has a remarkable grasp of your local area and will leverage their marketing techniques and connections to market your business. He or she will collect and organize all essential documents and handle sales and marketing demands. The broker will help with pricing your business and taking care of end-to-end demands throughout the selling process.
List your ad on the classified homepage
Sometimes, you might need a little boost to get noticed. One great way to do so is by listing your ad on classifieds homepage. Although this won’t guarantee sales, it will increase exposure. Try to be persistent, even when offers to buy the business are not completed. If it’s any consolation, more than half of all offers to buy are never completed.
Network both online and offline
Make a point of interacting with CEOs, publication writers, and website owners. Potential buyers are usually interested in specific fields. So, when they search for a business for sale, they go by business type and inform specialists first.
Again, most buyers attend industry-specific gatherings and networking events to market their product or service or learn about industry trends. Industry leaders can always give you a heads up should there be an upcoming event or an interested buyer.
You can also watch out for and respond to foreign buyers who search for companies for sale in your country or region. This might be a good way to network, or ask questions about business opportunities, the current corporate climate and other pertinent topics in a variety of different forums.
Just Contact Us
At BuyOrSellBusiness.com, our business brokers come with a combined 50+ years’ of experience in managing business sales. There’s plenty of good reasons to reach out to us today. Call us or message us online and we can help take the hassle out of the sale of your business.
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