Selling your company could be one of the largest financial transactions you ever make, and that is why you need to be cautious every step of the way. A single mistake or oversight could end up costing you quite a bit of money or bring your negotiations to a grinding halt. These few tips will help you sell your company quickly while avoiding some of the most common mistakes that business owners make.
Thoroughly Assess the Value of Your Business
When determining the value of your company, you will need to consider dozens of different variables. That includes your company’s physical assets, the state of the market, and your annual revenue. Without that information, you won’t be able to negotiate with a potential buyer who has done their homework. Some entrepreneurs might not even consider making an offer unless you have a good set of books and know your numbers well.
Make Your Business Look Good
Not many people would be willing to buy a company that was failing in terms of revenue or looked like a dump—aesthetically speaking, that is. Before trying to sell your business, work on getting your numbers up. If potential buyers can see that it has potential, then they just might see it as a worthwhile investment. Spruce up your company’s overall look as well. Get your office buildings looking pristine and presentable. If a potential buyer were to walk into your office building to see what they were considering investing in only to walk away cringing at the site or cultural feel, that’s not good. You want to do all you can to make your business look attractive.
Don’t Just Think About the Final Bid
There are many different factors to think about when selling a company, and the asking price is just one of those variables. You will need to consider how the payout is going to be structured and what the taxes will be like. As a business owner, you must also think about your management team and employees. You might need to lower your asking price if you want your employees to keep their jobs or receive fair severance packages.
Be Ready to Make Concessions
Making concessions is going to be one of the most difficult steps in this process, and that is why you might want to hire a corporate lawyer from a firm such as Carter and West Law. An experienced lawyer can help you determine if the other party is being fair and honest during the negotiations. Giving into some of the other party’s requests will give you additional bargaining chips when it comes time to settle on a final price or negotiate severance packages for your employees.
Research the Buyer
Doing a little bit of research on the buyer could help you avoid major problems down the road. You should know exactly what is driving the negotiator as well as the buyers they represent. That information is going to be extremely useful if you hit any roadblocks during the negotiations. There are many different ways to research a company on your own, but you might want to hire a third-party consultant who has experience analyzing companies.
In addition to these few tips and tricks, you need to remember to keep your emotions under control as well. Your company no doubt means quite a bit to you, but you must keep your emotions out of the equation if you want the negotiations to go smoothly.