Selling your business is a big decision and must not be taken lightly. As the owner, you will need to be committed to going through the process. Selling a business is a time-consuming endeavor. If you are not committed to closing the deal you will waste time and money. Selling your business is often the next logical strategic step in the evolution of the business. The reasons to sell vary from retirement, health issues, family relationships, burnout, downward industry trends, other business opportunities. Your motivation to sell is a very important factor in the sale process. This is often the first question we will ask prospective sellers.
To establish a solid plan for your business exit, your first step is to identify the different reasons that have led you to sell the business. You need to be honest and have well-defined reasoning. If you don’t fully understand why you want to sell you will make costly mistakes throughout the selling process. As your advisor, we need to understand your motivations so we can effectively market the business to potential buyers and advise you of the different offers and their financial impact.
Almost all sellers have the goal of receiving the highest price in the shortest time. Many are also concerned with the future of their company, the impact on the employees, and how the sale will impact their lives going forward. Your motivation to sell your business defines the importance of the various outcomes. For example, a seller may want to exit the business quickly.
This could be due to pending bankruptcy, burnout, death or illness of the owner or key person, or significant efforts needed to sustain business operations. The seller in these situations will often accept a lower price, rather than waiting for the highest offer.
Other sellers are willing to take their time to realize a higher price. These sellers are willing to stay involved with the daily operations. Their primary motivation is to have enough funds for retirement, or getting the full price for all the blood, sweat, and tears invested into the business. These sellers want the business to continue to prosper and many are willing to stay on as consultants to the new owner. This is a much different approach than the seller that must have a quick exit.
The key factor when you are considering your ideal outcome is your true motivation to sell. By carefully defining your motivations and desired outcomes you can help us define the variables that will shape our marketing strategy. Based on our experience of getting deals closed we can further educate you on how your motivations will impact your sale price and outcome.
