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Preparing to Sell a Business

By November 1, 2018 June 19th, 2019 No Comments
Preparing to Sell a Business

 

Business owners often put years of hard work and dedication into their companies, and they may not know what to do after they’re done building. If a sale is in the cards, the owner should know that preparation is a long-term effort. If you’re ready to sell, consider the tips below:

Get Things in Order

Most owners believe their companies are fine just the way they are. Sure, there may be an occasional glitch, but most of the time, things get done without major issues. However, it’s important for the owner to consider how the company may look to a big investor or a prudent buyer. A CGK M&A advisor can help you do a thorough review of your company’s assets, contracts, and processes to reduce hassles and increase the company’s value. This is a key first step in preparing for a sale.

Separate Assets by Business Line

Sometimes attempting to evaluate a multi-faceted business in its entirety results in a distorted view of its value and marketability. While the owner may see the company as a whole with multiple divisions, buyers may only be interested in certain aspects. Some buyers see how acquiring a target company’s key assets can give them a competitive advantage, and others may see certain assets as a liability. When assets are separated by division or product line, the seller can give buyers a clearer picture of the business’ strategic value.

Work With a Broker to Develop a Plan

Some small business owners avoid hiring outside help as a cost-cutting measure. However, history shows that sellers who hire a professional business broker enjoy greater peace of mind and higher net profits. When a seller realizes his or her own strengths and weaknesses early on, they’re more likely to hire a broker who can help them formulate a strong strategy before engaging potential buyers. An initial consultation with CGK can help you start planning.

Consider the Buyer’s Point of View

It’s quite common for business owners to focus exclusively on the sale price, but this strategy can cause them to leave money on the bargaining table. Sellers should ask themselves who their target buyers are and why they would want the company. Determining how potential buyers will use the company, before negotiations begin, can help the seller attain more profits and helps significantly with the development of the pitch book.

Keep Managers Focused on the Company (Not the Deal)

Many times, your business broker will deal with buyers asking for concessions because the last few months’ financial statements don’t meet their expectations. In many cases, these weak results are due to the management team’s tendency to focus on the deal at the expense of the day-to-day operations of the company. To avoid this expensive mistake, the seller’s strategy should include clear guidelines on who’s responsible for the company’s operations and who’s handling the deal. Our CGK business brokers take care of the sale from start to finish, which frees up the management team to address the company’s operational needs through the closing.

 

When an owner works hard to build a business from the ground up, selling can become an almost insurmountable task. However, when you follow these planning tips, your efforts will all be worthwhile. Call or email us today for a free consultation or visit our website for more information.

 

CGK Business Sales

CGK Business Sales

CGK Business Sales is a leading mergers and acquisitions and business brokers firm. Offices nationwide. Proprietary sales process. Credentialed advisors who close the deal. Local. Different. Better.