This is the first in a long series of posts designed to help business owners to prepare their businesses for sale. It is based on a more intense and personalised service we provide to our clients on a paid basis.
You’ll find with me that I am fairly straight forward in what I have to say; quite a shoot from the hip sort of guy, and if that offends you, I apologise for the offence, but not the message. In the interestS of getting my message across, I’m afraid that’s the way it’s going to be.
You’ll find as well, that there is very little censorship in here, apart from what you want to censor yourself, that is. You’ll do that by simply moving on; and that’s the reality of it. Selling businesses is not for sissies, and as in real life, you’ll have to tough out some situations, and walk away from others. All that I have to say is from the heart, and learned over almost 25 years of exposure to business sales. Much of it is unpleasant, but true.
Hopefully by the end of this series, I’ll have imparted a lot of that learning to you. So stick it out, print out the blogs, bookmark them, link them to whatever aggregation system you use, send them to your mates, reply to them, and engage with me on firstname.lastname@example.org.
There are ten easily definable steps to selling any business:
• The awakening
• Appreciating value
• Demonstrating value
• Due diligence
As a business person, at some stage in your business life you will sell a business, one way or another, even if it means giving the business to your kids one day, or selling the assets for best fire sale value in a liquidation or closing down sale.
The frightening reality is that all too often businesses need to be sold for reasons beyond those contemplated in the business plan, or considered by the owner; reasons such as owner illness and death, for starters. Beyond that though, sometimes a business needs to be sold because of someone else’s illness. I have been asked to sell a business because the owner’s wife had progressed in her illness to a point where he felt that he wanted to take over the nursing himself.
The awakening I want you to experience is twofold:
An awakening needs to occur with business people in general, who assume that they are immune to problems that afflict everyone else. Illness, heartache, crime, economic changes, infrastructural changes, family changes, new technologies, new opportunities… and the list could go on, but I’m sure you’re getting the gist of it.
The second awakening revolves around the attraction of a product. The facts are simple: A well prepared business sells easier, quicker, and for a better price than a business which is ill prepared. As a business owner you are aware that your product or service competes with other similar offerings on the market. Why then is it so difficult to understand that when you sell your business, it becomes a product itself? It competes for a limited amount of investment money, against all other businesses which are being sold at the same time. So just as you present your products or services based on price, quality and service, you will present your business for sale to the benefit of the transaction, and to the detriment of other businesses competing for the same investment Buck.
So to recap: Remember two things; firstly you will want to sell your business one day, and secondly, when you do, it will compete with other businesses being sold at the time. I will come back to both of these elements several times as this series unfolds. The other steps in the list will be addressed as we progress.