Entrepreneurs sell their startups for various reasons; loss of interest in the business, the desire to try something new, because that was the reason for starting it at first or retirement. If you have the need to sell your business startup, what steps can you take to get a fair deal?
Having the right information on how to go about the selling process is crucial if you realize that larger businesses are wary of investing in a business that may turn out to be a bad investment.
If you must go down that way, consider these useful tips
1. Show Positive Overview
No one buys a whim or a promise, they want to know for a certainty that the business that they are buying is a profitable one and they need to know the details. This implies they will want reliable information about the profits, risks, and the growth of the business.
If you have the intentions of selling your small business then, you must have this information ready before the buyer approaches you. If you can’t give the buyer convincing figures and a strong customer base, your proposals may not be enough to convince them to part with their money.
2. Let Your Business Be Transferable
Most buyers will appreciate a smooth transition of ownership. This is not limited to simple change of ownership; it includes the potential of the business to continue and thrive in your absence.
You should have a plan on ground to ease the smooth running of the business when you are out of the picture. Your proposal should include analysis of how you generate income from the business and how that can be sustained.
This is necessary because most buyers cannot afford the luxury of time to wait for years before recouping their investment. Therefore, make the process of running the business after the transaction very easy. If the facts and processes are not very clear, then your business may be for sale, but it isn’t transferable.
3. Know What Your Assets Are
Putting your business up for sale without adequate information like the source of income, expenses, debt incurred will help you set up a sale. Having this information in the proposal increases your chances of getting a good buyer without hitches.
However, you may not get a good offer or bargain for the business if you don’t know what your selling points are and how to sell those selling points to the buyer. You need to know the exact strengths of your business, whether it is your crop of staff, your machinery and equipments, your marketing strategy etc.
Knowing exactly what the oil in your machine is will help you sell it and get a good price. Buyers want to know, what is special about your business? You need to be prepared to answer that question.
4. Have A Strong Vision And Growth Plan
What is the vision of your business? To make money?… think again. I will ask again, what is your vision? Bigger businesses will want to buy businesses that doesn’t need much overhaul both structurally and in the spirit of the business. They want a business set up in line with their values and direction.
If you care at all for your business then you would also want to sell to a company that will maintain your business values and vision. It is also imperative that you have a growth plan in place for your buyer. When a buyer is presented with a viable growth plan, he may find the business attractive with potential for growth and success. This will improve the chances of selling the business for a good profit.
5. You Need Patience
Larger businesses are usually slow when it comes to investment. You must be prepared to endure the agonizingly slow pace of the transaction process. That way, you can cope with their slow pace without giving up and use the interval to put some finishing touches to your business.
6. Hire a broker
Brokers are experienced in the business and you will find their experience invaluable in getting yourself a good deal. Professional brokers know investors and what they want. They are conversant with the likely questions potential buyers will ask you and how to answer them.
Helping you to present your business in an appealing way to the right buyer will surely go a long way in helping you get a right deal for your business.
However, be ready to part with some of the sale price. Their fees may range from 5-10%. That shouldn’t be a problem if their input gets you a fair transaction.
7. Business Valuation
It is reasonable to determine the market value of your business before you proceed with the idea of selling it. This is advisable to help you avoid pricing it too low or too high. Pricing it too low will make you lose some money while pricing it too high will drive buyers away from you.
There are business appraisers that can help you evaluate the worth of your business at a reasonable fee. The appraiser will give you a detailed analysis of the business’s worth and the valuation report will authenticate your listed price.
With these 7 useful tips at your disposal, getting a good buyer for your business startup shouldn’t be difficult. Remember, that can be possible if you’ve put everything in order by implementing the suggestions given here. These practical suggestions have helped some business owners to sell their startups successfully. It can help you too if you play the game by the rules.