Top 5 Things You Need to Know Before Selling Your Business

Top 5 Things You Need to Know Before Selling Your Business

Selling Your Business

Selling your business is the biggest decision many people make in their lifetime. And there’s no need to risk making a wrong decision when help is available. Being confident in your decisions and understanding what steps to follow through the selling or acquisition process can help save you time and money. We have outlined what we believe are 5 of the most critical pieces of knowledge for selling your business that will reduce the roadblocks and ensure that you have a confident selling experience.

1. Kill Your Darlings

The writer, William Faulkner was quoted saying you must “kill your darlings”. Basically, if there are parts of your business that are near and dear to your heart as an owner they just won’t have the same value to a potential buyer as they do to you. Long-standing traditions or sentimental features or values of your company are irrelevant to a prospective owner and you must be willing to let go of them and not try and push them as value propositions.

2. Show them the Money

Investors are not interested in the past performance of a business nor do they care about potential growth projections based on your current revenues– they want one thing… show them the profit! An informed buyer will be looking at the profit margin after fixed and variable expenses are qualified and nothing else. On the surface, your business could be doing $100,000 in revenue each month but after $80,000 in expenses, your net profit per year is only $240,000! Revenue alone can be very deceiving!

3. Be Transparent

People are worried their company won’t sell if they really tell the truth– the good, the bad and the ugly. The truth is that if a buyer is really interested in acquiring your business they will have to do a deep dig on everything anyways. So it’s best practice to make your business as transparent as possible from the very beginning– flaws and all. You’d be surprised that honesty goes a long way with investors, especially seasoned ones who “always” know that there are skeletons in the closet and it’s just a matter of time before you find them. You will show good faith and save them time and money, meanwhile displaying credibility and confidence that you know everything about your company and are willing to represent it as accurately as possible.

4. The Proof is in the Paperwork

Buyers only trust verifiable documents that are either endorsed by a CPA, attorney and or a merger/ acquisition broker. A few Quickbook reports don’t cut it. Expect to be asked to produce legitimate documents that give accurate financials about your company, listing inventory, assets and up-to- date data that would be relevant to both the value of your company and potential liabilities as well. It is almost 100% guaranteed that you will not have a qualified buyer make an offer worth your time if there isn’t an exchange of solid data- nor should you trust that kind of transaction.

5. Bring on the Professionals

Business acquisitions and mergers are growing in popularity especially in online formats and many people just don’t know what they’re doing and they end up losing out. The obstacles and emotions that you will encounter during the experience of buying or selling can be avoided by simply choosing the right business broker for you. Our team here at Bridge Mergers and
Acquisitions has only one goal whether you’re buying or selling – make sure this is the right transaction for you. We take buyers through an extensive buyer interview process to ensure we are matching you with the right opportunity. The result? We cut the industry average for the number-of- buyer-tours- required-to- sell in half! This saves time for both buyers and sellers.

To find out more about Bridge Mergers and Acquisitions, reach out to us and one of our team members will be in touch very soon.  Contact us today.