When the time comes to sell your business, forward planning and communication are critical to a successful outcome. Richard Osborne, founder and CEO of the UK’s largest and most active online community for small and micro-businesses, UK Business Forums, has learned several valuable lessons from the ownership and sale of his highly successful businesses over the past thirty years. Here, Richard passes on some sage advice that will be invaluable to anyone considering or planning the sale of their own business.
Seek and follow professional legal advice
Probably the most important piece of advice for anyone planning to sell a business is to go through the proper channels and work with a Mergers and Acquisitions solicitor. This is regardless of how established your business is, who you may be selling it to, or how much money is involved.
Make sure your house is in order
Ensure it can operate profitably without you and, if you have a team working with you, get them on board with your plans and sort out arrangements to support them after the sale. With due diligence, ensure your company accounts and contracts are up to date and accurate, and create a key facts document of headline financial and business information from the last three years.
Plan your buyers
When designing an exit strategy for your business, get prepared to sell. Plan your buyers, get to know them, and nurture a relationship with them that showcases your business as a good source of revenue for them. When all your homework is done and you have potential buyers interested, you need to put up the sign. There are several ways to do this, such as an independent accountant sending letters to prospective buyers, engaging an agent, or speaking directly and frankly to prospects yourself.
Don’t take it personally
When you have started a business and invested so much time and money into it, it becomes part of you. It’s therefore only natural that you will feel protective of it and could take any criticisms personally. Don’t! It’s really important to remember business sales negotiations are not a personal reflection on you. They’re transactions for an asset. No one really cares what you think your business is worth because it is only worth what someone else is willing to pay for it. The buyer’s legal team will be trying to drive down the price and strike a great deal for their client
Don’t be afraid to walk away
While your potential purchaser’s legal team will be trying to secure the best possible deal for their client, it is important to remember that there is little point in you selling your business if the deal isn’t right for you too. Always be prepared to walk away from the wrong deal.
Whilst experience is a wonderful and valuable thing, if you are planning to sell your business, don’t learn the hard way. Be prepared, have a solid plan and do your homework first.
