The decision to sell your business is usually one of the most important decisions you will ever make. It is a complex process involving many steps, from gathering the relevant paperwork to negotiating with potential buyers. You want to make sure you don’t overlook any critical details that could affect the sale. With the right checklist for selling a business, you can prepare your company for sale.
With over 20 years of experience in selling companies and a database of more than 40,000 active potential buyers, we’ve put together this selling your business checklist of 10 items to consider.
Selling a business with a checklist as guidance can help you in the right direction and enhance your chances of making the most profit from your company. The following steps will help you prepare your business.
Before entering the process of selling your company, you need to decide whether doing so is the right step for you. Many factors go into this decision, so assessing your motivations for wanting to sell is essential.
In some cases, there is a compelling reason to sell, such as health issues, or perhaps you want to spend more time with family and friends. In other cases, the decision is much more complex. Some things to consider are:
After you carefully consider all of the relevant factors and you feel that it is time to explore the possibility of selling your company, you can move on to other items in the checklist.
Business brokers and mergers and acquisitions (M&A) advisors have specialized knowledge and experience in the selling process. They can provide valuable insights into market trends, pricing strategies and buyer expectations so you can make informed decisions.
Look for business brokers that have good reviews from business sellers and experience selling your type of business. Find out about their process and get an opinion on what they think your company would sell for. These professionals can help you accurately assess the value of your business, using various valuation methods and market data. This will help you to determine whether or not you want to move forward.
A good business broker can give you a ballpark on what your business will sell for, but to give you a more accurate assessment, they will need to review your financial information. You’ll need to provide:
After you accept an offer from a buyer, you will need to provide more detailed information on your business so that the buyer can confirm that things check out correctly with the company before they purchase it. Collaborate with an accountant to review your financials for accuracy and to present a clearer picture of your ongoing income and expenses.
Your accountant will typically communicate with the buyer’s accountant to have a smooth flow of information and get their questions answered efficiently. If you need an accountant, a business broker can recommend one for you.
As part of the sale process, you’ll also need to provide information on what makes your business unique. Identifying your business’s strengths helps you present your company in the best light to potential buyers.
You can identify and highlight these strengths by considering factors such as:
Offer potential buyers a detailed view of your business’s day-to-day functioning and discuss how a new owner could improve your existing operations. Highlight areas for growth like expanding product lines, entering new markets or enhancing marketing strategies.
Adding value to your company before you sell can help attract potential buyers and maximize your sale price. Here are several strategies to enhance your business’s perceived value:
Protecting the confidentiality of your business sale ensures that no sensitive information is leaked to employees, suppliers, competitors or customers before you’re ready to announce the sale. Experienced business brokers understand the importance of confidentiality and will market your business discreetly. Your company’s identity is revealed only when potential buyers have signed confidentiality agreements and demonstrated their qualifications.
Be cautious about who you tell about the sale. If you need to disclose the sale to staff, suppliers or other stakeholders, ensure they sign a confidentiality agreement to minimize the risk of information spreading.
You want to speak with the best candidates to buy your business. Establish a collaborative effort with your business broker to guide them on what is important to you in a potential buyer. They can then assist you in introducing the best potential buyers first.
There is a give and take with any business sale process, but factors to consider include:
When you identify the most important things, you can work toward negotiating an offer that is workable for you and the right buyer.
Make sure that you have a lawyer who has experience handling the sale of a business. While many lawyers excel in their areas of expertise, not all have the knowledge needed for the complexities of selling a business. If they lack experience in this field, it can lead to misunderstandings about the details of the sale.
Once you have the right lawyer, you will work with them to negotiate the purchase and sale agreement. This will be based on the terms of the offer letter that were negotiated but will have more details, including the transaction’s legal aspects. Both the buyer’s and seller’s attorneys will have their own checklists for the business sale transaction, and any differences of opinion will need to be worked out. A business broker can help keep the deal moving forward when the attorneys hit any roadblocks.
Attorneys are paid to be careful. It’s important to remember why you wanted to sell the business. As we counsel both buyers and sellers, there is nothing in life that is totally risk-free. At the end of the day, you need to decide what is most important to you. You don’t want to let small details get in the way of what is overall the right decision to achieve your goals.
During the business sale process, you’ll want to have a good relationship with the buyer so that you can easily share information on what they will need to do to be successful in the business. Both before and after the sale, you’ll want to provide them with the nuances of the company’s products and services. Additionally, the buyer will likely want information on the employees, customers, suppliers and other factors that are important for the ongoing success of the business.
Sometimes, you need more guidance than a checklist for selling a business can provide. Synergy Business Brokers has been helping business owners with the sale of their companies since 2002. We specialize in selling companies in construction, manufacturing, technology, distribution, services and healthcare. If you own a profitable company in one of these sectors and are ready to sell, fill out our confidential seller registration form.
