"I want to sell my Business!"
Sometimes business owners come to me asking me to sell their business – right now. It is often a one- or two-sentence request, sometimes with pictures included.
I’m not a business broker, but this sounds like desperation and is the exact wrong signal and strategy to use when trying to cash out and sell your business.
I do not blame these owners for feeling desperate. After all, think of all that has happened in just the last 13 years, from the financial crisis of 2008 to the commodity sell-off and finally Covid. So many owners decided that the last crisis was one too many, and enough is enough.
However, you will not get much sympathy in the marketplace. To sell your business and capture its total value, you need to be prepared to fight for what should be yours.
When you look to sell your business, being prepared means that you’re financially and mentally ready and that your business is all set to go; if you are not prepared, you may have to sell at a high discount or be unable to sell at all.
Financially ready for those looking to sell and retire means that both the money you make from selling your business and your other assets will support you and your family for the rest of your life. This can mean 30 or 40 years of support, so you need to consider your whole situation. Obviously, the price you get for your business is critical for your family’s future.
Mentally ready means you are selling the business for the “right” reasons and not being forced by health or necessity to do so. You underestimate your mental readiness at your own risk. If you feel compelled to sell, you will likely end up selling at a discount.
Mental readiness means understanding that the company is often an integral part of your identity and life and that its loss must be considered. What will you do with yourself the day after? Finally, your business might be like your “child”, and once it is sold, you may not like the new direction your child is headed, nor the new friends it hangs out with on the business street corner.
In short, people who regret selling often did not think through all the mental aspects before the sale, were more vulnerable to being exploited, and were more at a loss of what to do with themselves.
Is your business really ready to be sold? 90% of the companies that try to sell fail because they are not prepared to sell, even though they have been profitable for years. Being ready to sell means optimising your business on the 8 key factors buyers consider when buying a company.
These can range from any or all of the following:
- A buyer’s comfort that the business is not too dependent upon you or any key employee(s), supplier(s), or customer(s)
- The potential growth of your business,
- The financial performance and record-keeping,
- The recurring nature of your revenues,
- Your customer experience and other factors.
If you do not optimise your business on these 8 key factors, you may find it hard to sell, or you may have to accept a lower price.
Instead, prepare yourself and transform your company from a 24/7 job into an Independent asset. A business that frees up your time, grows your wealth, and provides you with the peace of mind of owning a company that is sellable and that you can cash out when the time is right for you.
Find out more at https://sophiall.com. We have free EBooks and surveys to measure your financial and mental readiness and how sellable your business is at https://sophiall.com/sophiall-free-resources/.