Whilst you may have a variety of reasons for selling your business, your approach when looking to find a buyer must be as carefully judged as any other strategic decision.
Unless you already have a viable purchaser waiting in line, or have planned a family succession, you are sure to need professional help with the certain aspects of the process of valuing, marketing and finding a suitable buyer for your business. So let’s look at some points you should consider to maximise your chances of achieving a fruitful outcome.
Find a buyer: Arrange a professional valuation
If you are planning to try marketing your business directly, you must give some thought to how you will establish the true value of your business and thus arrive at a reasonable selling price.
The most sensible tactic is to enlist the help of a business valuation expert who will ensure the worth of your business is properly calculated using one of the standard valuation methods recognised and accepted throughout the business world. This assessment will the support your advertised pricing, allowing you to respond politely but firmly if potential buyers should challenge the authenticity of your figures.
In order to prepare a credible report and valuation, your valuer will need access to your financial records. This is likely to at least include your audited annual financial statements, order book and a detailed list of your business assets.
If you are a little disappointed with the final valuation figure, you should discuss the matter with your valuation expert who will be able to advise you further.
It may be that employing a different valuation strategy may yield a better result, or alternatively, you may find that a certain approach has been used because your industry sector traditionally favours one valuation method over another.
Remember that potential buyers will wish to vet your valuation, and will probably secure an independent professional opinion of their own before submitting any final offer.
Find a buyer: Make prudent use of your networks
Anyone planning to sell a business through their own efforts faces a tough dilemma: You cannot sell your business without making others aware you have approached the market, but letting your customers and suppliers know you plan to sell may well have a detrimental impact on your business.
As a result, any informal “advertising” you may attempt by spreading the word within your own business networks must be conducted with the utmost discretion. Disclosing your intentions to business rivals means you expose yourself to the risk that the information may be used to gain a competitive advantage.
Furthermore, if valued and loyal staff should hear rumours about your intention to sell before you make an official announcement, there is a real chance some may decide to move on to pre-empt fears this may raise about job security.
Such outcomes have the potential to undermine your company’s prospects, which may in turn have implications for your business valuation and your chances of concluding a sale on advantageous terms. To avoid such damaging consequences, you could use “blind” advertising (which won’t reveal company details) or ask a broker to list your business for sale in strict confidence.
Find a buyer: Target relevant business websites
Your industry is sure to have its own dedicated online portals, trade magazines, regular newsletters and similar information outlets where you could advertise your business for sale with some degree of anonymity.
Jo joined Dynamis in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.