Top 10 Tips for Selling your Business

Most business sales are usually once-in-a-lifetime events. For many business owners, the prospect of selling their business after years of hard work can be emotional and difficult. This is not the time to take short cuts – it is critical to use the same care and patience that it took to grow and sustain your business.

Based on our 30 years of experience helping people sell their businesses below our Top 10 list of tips to help make the experience a positive and successful one.

1. Know the value of your business.
Inflated expectations interfere with your advisor's ability to negotiate the best value for you. A third party independent valuation will help you establish the true market value of your business.

2. Carry on business as usual.
Don't become so obsessed with the transaction that you ignore day-to-day demands. Your eventual buyer will need to see a healthy business, not one suffering from neglect.

3. Keep the sale process strictly confidential.
A breach of confidentiality surrounding the sale of a business can alter the transaction dramatically. When clients, employees or vendors become aware of a potential sale they get nervous with the unknown and the natural instinct is to leave. Avoid this uncomfortable scenario by maintaining confidentiality.

4. Prepare for the sale well in advance.
Be sure your records are detailed and complete for at least the past few years and do all pertinent legal or accounting housecleaning as well as a physical sprucing up of the plant or office.
5. Anticipate information the buyer may request.
In order to obtain financing, the buyer will need appraisals on all assets, plus information to satisfy any environmental regulations that may apply.

6. Achieve the highest price through buyer competition.
Since this can be tricky, you're advised to let your intermediary, as a third party, create a competitive situation with buyers to position you for the best transaction value.

7. Be flexible.
Do not be the kind of seller who wants all cash at the closing especially given the current market conditions. Be prepared to provide seller financing and other creative financing solutions to attract the right buyer.

8. Negotiate, do not dominate.
You may be used to being your own boss, but the buyer may be used to having his way too. With your intermediary's help, decide in advance what is most important to you and be prepared to give and take.

9. Time kills deals.
To keep the momentum up, work with your intermediary, your accountant, your lawyer and other experts who may be required to be sure that potential buyers stay on a time schedule and that offers move in a timely fashion.

10. Be willing to stay involved.
Even if the process has been exhausting, realize that the buyer may want you to stay within arm's reach for a while. Consult with your intermediary to determine how you can best achieve a smooth transition.

Above all, remember that planning ahead is key. Too many business owners fail to plan for the day when they will want to sell. Then something happens - most often a health problem - and they are forced to sell quickly. Rushing to sell can result in a failure to recoup the true value of the business. The best time to sell is when you don't have to!