Selling your business and moving on to pastures new is a huge step to take and a decision with requires a huge amount of thought and consideration. Consequently when you reach the stage of listing your business for sale, the chances are you are looking ahead to the future with excitement and making plans for what your next move is going to be once the company is sold. It can therefore be difficult when you are not able to put these plans into action if your business remains unsold several months down the line. Here are some things which may be hampering your chances of securing that all important sale.
- Money, money, money – Without a doubt, the biggest barrier to selling a business is the price tag attached to it. Quite simply, something is only worth what someone else is willing to pay for it. If your business is garnering interest but this interest is not converting into offers, you may need to look at the asking price.
Your business, particularly if you have built it up from scratch, likely holds a lot of sentimental value to you. A purchaser, however, will not have the same feelings and will not be willing to pay you any more than its market worth. Don’t let emotions cloud your judgement. This is a business transaction and you should treat it as such. Get a professional valuation conducted so you know exactly where you should be pitching your business.
- Are the right people seeing it? – If your business is generating little to no interest it may not necessarily be the price which is the issue. You need to ensure that your offering is being seen by the right people. This is where a business adviser could provide invaluable help. An experienced adviser should have a database of individuals and companies who are actively seeking their next acquisition opportunity. Once a potential buyer has been pinpointed, the adviser will then be able to market your business to them in the most appropriate way, increasing your chance of a successful sale considerably.
- Check those terms and conditions – How are you asking to be paid? Are you offering flexible payment terms, or demanding the whole amount at once? The more options you can provide, the easier it will be to sell your business. However, this does have to be balanced against what you want to achieve from the sale.
Sometimes the business owner is crucial to the success of the company - are you offering to stay on for the short term, or are you planning on making a clean break altogether? If you are flexible in this, you may be able to increase the interest in your business significantly. If it is not possible for you to stay you may wish to consider offering training to the new owners to help smooth the transition process and so they can hit the ground running.
- Knowledge is power – Put yourself in the shoes of a buyer - would you buy this company based on the information available and the way it is presented? While it may be obviously to you that you will be eager to paint your company in the best light possible, you may simultaneously be reluctant to release detailed information about your business into the public domain. This is understandable, but realistically, no one is going to buy a business without knowing this information.
Make sure you are giving a full picture of your business when asked. If it looks like you are trying to hide something, you are likely to put off buyers from enquiring any further. You also need to be prepared to hand over your financials and allow them to be scrutinised. Further down the line you may also be asked to provide details on your clients, suppliers, and ongoing contracts. However, this is usually done as part of the due diligence process after a formal offer has been received and accepted.
If you are struggling to sell your business, the best piece of advice is not to panic. Remember, it typically takes between 9-12 months to complete a sale, sometimes it can take considerably longer. The good news is that there are things you can do to help speed the process up. If you haven’t already, you should give serious thought to employing the services of a professional business adviser who can give you the best possible chance of selling your business. Selling a business is something you are likely to do only once, so you should make sure you are doing it right. The experts at Selling My Business can assist you every step of the way. From providing you with a realistic valuation, marketing the business for sale, and guiding you through the due diligence procedure, we are here to provide expert help and advice.
To find out if we can help you sell your business, contact the knowledgeable team at Selling My Business today.