The idea of selling your business can be a freeing one. You may imagine retiring, spending more time with family or even beginning a new business endeavor.
However, it’s necessary to understand what’s involved in a sale before you start the process. Here are a few important factors:
Nail the evaluation
The valuation of your company is a key factor in selling. When forming the valuation, make sure to:
- Examine parallel sales of similar companies
- Come up with a realistic net worth (including revenue streams)
- Weigh assets and liabilities
It can be hard to fairly evaluate a company you’ve worked hard to build from the ground up. It may benefit you to talk with a financial representative to give you an accurate assessment.
Prepare your inner circle
No company runs through just one person. It’s important for you to talk to your most trusted workers to prepare them for the potential transition.
This doesn’t mean releasing a newsletter or press release announcing your intent to sell. Instead, quietly discuss the potential for a sale and weigh the timing. Are those who will be most crucial to the company’s success equipped to handle the company changing hands?
Know when it’s time to let go
Selling a company can be extremely difficult, especially when you’ve spent countless hours building it up. There’s a reason so many business owners become lifelong workers in their companies.
Many business owners couldn’t imagine doing anything else. That’s why it’s important to do an emotional self-inventory before putting the company on the market.
Set some goals for the future
This may sound silly but it’s important to have a plan for your future after your company. After you sell your business, there’s no going back. Make sure you’ll have enough from the sale to take you into retirement or help you start the next juncture in your professional life.
Run the numbers and make sure the sale will accommodate your lifestyle, or identify what changes will have to be made.
Don’t handle the transaction alone
While it may seem daunting, selling your business can offer a freedom that few other things can. It’s important to make sure your transaction goes off flawlessly.
A knowledgeable attorney can help you facilitate the sale with confidence.