Top 3 Overlooked Tips when Selling a Business

Selling a business can be a daunting process and worries often arise about going about things the ‘right’ way. But while first-time sellers are understandably unlikely to want to branch out, those with more experience are benefiting from looking at things with a different perspective. We’ve put together three often overlooked pieces of advice for sellers to think about in order to get the most out their business sale.

1. There is no such thing as a magic formula for valuation

Valuation is of course one of the biggest factors when it comes to selling a business. You've probably invested a lot more than just money in your company, so getting a price that reflects these efforts is naturally a top priority.

But unfortunately there is no formulaic solution to the question 'How much is my business worth?'. While looking at your firm's profits, expenses, assets and the market in which it operates will give you a ballpark figure to work with, essentially the business is worth however much you are willing to sell it for and a buyer is willing to pay for it. There is no x + y solution to this matter and trying to turn valuation into an exact science will only bring extra stress and hold up the sale process.

Monitor the market, look at what you have, decide what you want and settle on a figure that takes all of these issues into account. If you want any further information then consider consulting an acquisition expert, someone familiar with your sector, who should be able to give you a better idea of what similar businesses have sold for.

2. Business brokers are not your only option

Using a business broker is often a good idea if you're still learning the ropes. To an extent they will hold your hand and make sure all the important legal and financial stages are covered. They should help push for a decent price as well, given that much of their income will come from a percentage cut of your business' sale price.

But those who have been through the system and feel more confident could save themselves thousands by selling their business without a broker. Advertising directly through an independent service like the Business Sale Report can generate good quality leads, give you more control over the process and increase the money that ends up in your pocket at the end of the day.

Choosing to sell without a broker does mean a lot more work in terms of ensuring that you tick all the boxes, but good legal contacts and a dedicated serious approach to the matter at hand makes selling without a broker a perfectly viable route.

3. Don't slow down

With everything gearing up to change, it can be tempting to let business slow down in the run up to a sale. But ramping up new activity and expansion at this point makes a huge difference when it comes to generating extra interest in a sale. Start implementing new plans for organic growth when you first decide to put a business on the market and you're more likely to have a choice of bidders keen to take on a company that's really starting to 'go places'.

If you are seriously considering selling then we’d advise putting some initiatives in place six months to a year ahead of your ideal exit period; and remember that it is not unheard of for sellers to take their business off the market to make improvements to better prepare a company for sale. Strong balance books are obviously appealing but serious buyers will also be looking for things like a skilled workforce and management team, a strong client bank - ideally including corporate or government contracts - and key trade licenses and agreements.

To some extent buyer interests can be monitored as a trend, and intellectual property is among the favourable assets that savvy buyers are on the lookout for at the moment. But all of the above can be huge factors to positively affect the sale price of your company and are all things that you can influence through careful planning.

Selling a business is a complicated affair that requires careful consideration at all stages, but the most successful sellers take the time to consider some of the methods and routes to success that aren't always being covered in the headlines.

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