Timing is Everything

When selling a business, timing is everything.  The key to a successful deal is to prepare well, come out strong and maintain momentum throughout the business sale process. Here are things to consider:

Know when it is a good time to sell YOUR business. Usually, the best time to sell is when sales and profits have been increasing each year and signs indicate the trend will continue. Current market conditions also play a role in prices paid for good businesses.

Know why you want to sell. A committed resolve to sell is essential. One of the first questions buyers ask is, "Why is the owner selling?" They ask this question to measure, in their minds, the probability that there may be skeletons in the closet.

Know the company’s best features and its blemishes. Yes, highlighting the awesomeness of your business should take center stage. But no company is perfect. Be ready to disclose the imperfections also. Buyers do not like surprises, nor do business brokers or other members of the professional team involved in the sale process. Problems uncovered late can threaten the deal. The more issues brought to the table and worked out in advance, the better chance of a smooth closing.

Know the value of your business. Get a business valuation by a reputable firm to understand what to expect in the current marketplace. This is an initial step in determining if the sale would meet your objectives.

Know that your asking price is based on reality… a reality that buyers and their lenders can believe in. The buyer will look at return on investment and their lenders will require that the deal make sense in terms of debt repayment. Over-priced businesses do not get sold.

Know that operational details are not just in your head. Buyers want organized records, files, contracts, policies, employee records, training manuals, how-to manuals, business processes, systems and controls that are reliable and organized to keep things going after you're gone.

Know your numbers. Be able to provide accurate financial statements and tax returns and produce key financial reports and performance metrics.

Know that you can provide the road map to even greener pastures. Buyers are interested in the future. A growth plan and marketing plan will help a prospective buyer understand where opportunities exist and what could be done to take the business to the next level.