Author: Pat Pattinson
The decision to sell your business is a huge one. You’ve spent countless hours building it to where it is today, and probably lots of money too. Whether you are selling for financial or personal reasons, the decision is never easy – and it doesn’t stop there. Even once you’ve decided that selling your business is the best option, there are still plenty more questions to ask yourself. In this article, we are going to answer 5 of the most commonly asked questions by business owners who are considering selling their business.
1. Is selling my business the right option for me?
There is no wrong answer to this question. Some of the most common reasons to sell your business are emigration, new ventures and health reasons. People frequently sell their businesses due to financial difficulties – a less favourable circumstance – and selling their business is a last resort. Of course this is never a good position to be in, but an important thing to remember is to always be honest about your reason for selling to ensure a smooth sale based on trust and transparency.
2. Who should I tell about the sale?
While in theory, it may be easy to separate business and emotion, the reality is this is rarely the case. Your stakeholders – staff, customers and suppliers – are governed by their emotions, and the prospect of change often incites fear. While these stakeholders may be loyal, they also have their own best interests in mind, and this means thinking ahead. For example, divulging the upcoming sale may force your employees to look at alternatives (often with your competitors) in order to ensure job security. For this reason, confidentiality is of utmost importance.
3. Should I use a broker to sell my business?
Yes. Using a broker helps ensure the confidentiality of the sale as you will not be the contact person. Similarly, using a broker helps build trust among potential buyers as you are turning to an expert for assistance. Think of it this way: you may drive your car, but you may not know exactly how to repair everything that goes wrong with it. Similarly, you may run your business, but your broker will know exactly how to sell your business.
4. Should I divulge my reason for selling my business?
Yes. Honesty truly is the best policy. You should be transparent with your broker and potential buyer about your reason for selling. Don’t sugar-coat anything or be evasive, or you will lose your potential buyer’s trust. Similarly, if your reason for selling is not consistent to what your broker claims your reason is, the potential buyer will think you have something to hide and the sale will likely fall through.
5. Should I sell my business at a reduced cost?
This may seem like a good idea in order to speed up the process, but the truth is a potential buyer may interpret a bargain as “too good to be true”. Unless you have the opportunity to explain why you have reduced the price, this may make buyers unnecessarily weary. Instead, consider alternatives such as payment terms or including stock or the sale of shares.
Are you convinced that selling your business is a step in the right direction for you? Have you gained some clarity on the do’s and don’ts of the selling process? These bits of advice only form the tip of the iceberg – there’s a whole lot more that goes into selling your business. If you want to make the most out of your upcoming sale, join our course on Facebook by following this link. Remember, nothing in business is guaranteed – not even selling your business – but with these tips and guidance you will receive in the course, you will be prepared for whatever comes at you and your business.