When you set up your own business, you’ll inevitably find yourself investing a lot into it. This doesn’t just mean money. It means time and effort too. You have to go through a lot to get things off the ground, never mind keeping things up and running. That’s before you even think of expansion, progression and success. You have to come up with an innovative product or service that either fills a gap in the market or offers customers a better alternative to what’s already on the market. You need to conduct a whole lot of market research to identify and get into the minds of your target demographic. You have to go through the product development to ensure your idea lives up to expectations. You have to sort out manufacturing. You need to focus on web development and web design. You have to put a whole lot of time and effort into branding, marketing and advertising. That’s before we get into the ins and outs of specific processes, such as SEO, collaboration with social media influencers and developing a base of loyal and hard working employees. So, the concept of selling up may sound unfathomable for many of us. But, for many businesses, there does come a time where you may want to, or even need to, consider selling up and moving on to something else. Here are a few pieces of information and advice that you should bear in mind. They’ll help you to determine whether you should continue working on your business, or whether to sell up, at any given time!
Reasons to Sell Up
There are so many reasons that you might want to sell your business. But some are more common or logical than others. Sometimes, businesses will be failing. They might have failed to make it off the ground with any emphasis, struggling to get customers to identify and engage with the brand or product, or simply struggling to make sufficient sales to drive good profit margins. If you’ve struggled to get off the ground at all, you might not have the available funding to pump into the areas of your business that you need to focus on to succeed. Selling up could allow your brand to move forward, while compensating you with an amiable payout. Sometimes, your brand will be off the ground and thriving, only to face some sort of scandal or issue that marrs the company’s reputation. While you may be unable to salvage the situation and continue making profits yourself, others may be interested in purchasing the rights to your products and their designs and continuing selling these items under a new company name and brand. This can provide you with something rather than the nothing that may result from the issues you’ve faced. Sometimes, your business may be thriving and experiencing profound success, but you simply don’t want to continue leading the company yourself. Maybe you’ve earned more than you need and can retire early. Maybe your heart simply isn’t in the company anymore and you want to pursue other areas of interest. Selling up could give you a huge lump sum of money that will allow you to retire early or invest in a new venture!
The Process of Selling Up
Of course, selling up is a process that can take a long period of time. You don’t necessarily want to rush the process. Instead, taking your time and doing things properly can help to secure you a better deal. Here are a few steps that you can expect to face though!
Value Your Business
First, it’s a good idea to have at least a vague estimate of how much your business is worth. This will ensure that you only entertain prospective buyers who can actually afford to make a purchase. You don’t want to waste your time in meetings and discussions with someone who is going to make way too low an offer. There are professionals out there who specialize in valuing companies. Their services will ensure that you put it on the market for the right price.
Prepare for the Sale
As we’ve mentioned, sales don’t happen overnight. Instead, you need to make sure that you thoroughly prepare your business for the sale. This can take place over the duration of months or even a couple of years. You want to make your employees less dependent on you for guidance and decision making.You also want to make sure you are taking good records, such as financial records, which will make the transfer of the business much more smooth.
Find a Broker
A broker will give your business a much better chance of selling for a good price. Professional business brokers can take the selling process out of your hands and free up your time and your employees’ time to focus on ensuring that the business keeps running smoothly, making it more appealing to prospective buyers. Brokers often work on commission, so using one will ensure that they push for the highest price you can possibly get for your company. This, in turn, maximizes the amount of money you get from the sale of your company too.
Entertain Multiple Buyers
Sometimes, sales fall through unexpectedly. This is why it’s a good idea to entertain multiple buyers in the lead up to a sale. This can also create a sense of rivalry and competition between potential buyers, encouraging them to make more competitive offers for your company. Putting all of your eggs in one basket could result in problems if the potential buyer pulls out of the process at any point.
Sure, selling a business is never going to be a simple, overnight task. But if it’s something that you’re considering, for whatever reasons, hopefully, the information above will help to get you started in the right direction!