Planning to Sell Your Business? - Know the Steps to Ensuring a Successful Outcome

At the risk of oversimplifying the very complex process of selling a business, by taking the time to thoroughly address each of the issues previously outlined, you will significantly enhance your chances of a successful outcome.

Steps to ensuring a successful business sale outcome:

  1. Know the real reason why you want to sell.
    1. Be clear about your motivations as this will dictate the sale process.
    2. Honestly assess whether you are really ready to sell - seller’s regret can dampen any outcome.
  2. Clearly define and prioritize your sale objectives.
    1. Develop an exit strategy with specific goals and milestones.
    2. Have a solid post sale personal financial plan.
  3. Evaluate the saleability of your business through the eyes of a buyer (Would you buy your business?)
    1. Make yourself expendable.
  4. Determine how much your business is worth in the market.
    1. Understand the different approaches to valuing your business.
    2. Have your business valued by a certified valuation specialist
  5. Take steps now to increase the value of your business.
    1. Explore ways to increase cash flow, increase revenue, and increase operational efficiency.
    2. Get your house in order.
  6. Consider the interests of all stakeholders
    1. Will all family members get on board?
    2. Identify any stakeholder who can say “no” to a deal.
    3. Anticipate how your management and employees will react.
  7. Educate yourself about the sale process.
    1. Focus on maintaining confidentiality throughout the process.
    2. Have a plan for how and when you communicate the plan to your employees.
  8. Begin forming your business sale advisory team.
    1. Evaluate your existing advisors’ capacity to guide you through the business sale process.
    2. Have your advisory team in place before you begin the sale process:
      1. A business intermediary who works exclusively on your behalf
      2. An attorney experienced in business transactions
      3. An accountant experienced in business transactions
      4. A wealth manager who can work in collaboration with a team of advisors
    3. Have a clear plan in place to manage your business during the sale process
  9. Run your business as if you are not going to sell it - because you might not.

That brings us to this tenth step, which is to be very clear on the essential steps to ensure a successful outcome. Essentially, this checklist should form the blueprint for your business sale plan, which should be developed further by your team of advisors.