Top Ten Tips when Selling a Business
- Start planning early – it can take months or years to prepare a business for sale and in doing so, ensuring that full value is obtained.
- Become better known in your industry – it can be very beneficial to have an active role in your industry association or other sector body. People should know of your business inside and outside the sector.
- Develop your management team – the sign of a well run company – with less risk to the buyer – is when the owner manager can afford to take time off!
- Avoid the skeletons in the closet – these must be identified well in advance and either dealt with or communicated to the buyer at the earliest opportunity.
- Addressing structural issues prior to selling – this is particularly important with family businesses where there are sleeping shareholders. Few acquirers wish to buy less than 100% shareholding.
- Have accurate timely financial information available – people need to build up trust in you and your business before they will consider it seriously.
- Develop an alternative to sale – the best negotiating tactic is to have a believable alternative and be prepared to walk away
- Ensure strong order/sales/profits leading up to the sale – the sure-fire way to give confidence and prevent price reductions at the last minute.
- Get the right advisors – ensure that they have experience in business sales and can work together.
- Keep your exit plans secret – uncertainty is the worst motivator and however good your intentions it rarely pays to let the “cat out of the bag”.
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