24 Apr Around the Web: A Week in Summary
A recent article from The Good Men Project entitled “7 Questions to Answer Before Selling Your Business” explains the factors that go into the sale of a business that owners need to understand before undertaking the process of selling their business.
Selling a business is a complicated process that, if improperly prepared for, can be very difficult to sway in your favor. Before selling your business, it’s important to be able to answer these questions:
- Are you and your business ‘sale ready’? This includes the state of your books, equipment, accounts and position in the market.
- What is your business worth? Having a professional valuation done is imperative before heading to market.
- How healthy is your industry? If it’s in the middle of a transition or a downturn, it may be best to wait it out before listing your company.
- Who is your buyer? Work with your business broker or advisor to create a clear buyer persona so that your marketing team can target the right buyers and help you achieve the optimal outcome of your sale.
- How long will it take? Selling a business is a lengthy process and it’s important to be realistic about your timelines and the effect they will have on your bottom line.
- How will I get paid? There are many ways to complete the transaction, consulting with your broker and considering both your needs and the buyer’s needs will bring you to this answer.
A recent article from Forbes.com entitled “Identifying Key Employees When Buying A Business” discusses the intricacies of pinpointing and retaining the employees that are critical to the future success of a business.
Many business owners do not want their staff to know about the sale of the business, in fear of them leaving. As a buyer, however, it is very important to find out how many, if any, of the current employees play a critical role in the business operations and growth. Once this is determined, a savvy buyer would then determine how critical said employee is, and how easily they can be replaced if this becomes necessary. Finally, it is in the company’s best interest if you as a new owner take some form of action going forward that will help to retain any crucial staff members as best as possible.
This can be tricky to navigate with both the employees and the current owner, and is therefore best handled after all other conditions are met within the deal. However, it can also make or break your success as a new business owner once the transfer of ownership has occurred.
A recent article from BusinessBroker.net entitled “Moving From Corporate to Owning a Business” explains the process for researching, inquiring about and purchasing your first business.
Many people eventually decide to leave their corporate jobs behind in order to seek out other opportunities. Once this decision has been made, the next step is to do some research and find a business broker that you feel comfortable with and trust. Discuss your needs and desires in a business opportunity with your broker and work together to find offers that interest you. Once you’ve found a business of interest, you will need to fill out a confidentiality agreement in order to receive sensitive details about the business. If the business still feels like a good fit, your broker will schedule an appointment with the owner for you and if deemed appropriate, write up an offer on your behalf.
Following an offer, you will be responsible for thoroughly inspecting the business, its financials and operations alongside your business broker or advisors. Be sure to ask the buyer as many questions as you need and have your broker with you during every meeting. If all contingencies have been met during the negotiations that follow your offer, then you and the owner will both sign paperwork and you will be a new business owner!