Selling
your business will probably be your biggest sale ever. But,
if you are to get a top price for the sale, you'll need to satisfy
your buyer on two critical points -
Firstly, your company should be showing good returns. Put simply
- you will have more chance of making the sale and getting a
top price if you are selling a business that's profitable.
Secondly, to get top price for the sale, there needs to be a
strong likelihood that these good profits will continue for
the new owner. This is why you (as current owner), have an important
part to play in the transition period before, during and after
the sale.
Your customers and clients may be watching the changeover very
closely. If you have a successful business, then it is fair
to assume that your customers have grown to like you and the
way you run your business.
Remember, most people don't like change. This transition period
before, during and after the sale is therefore critical, if
you get a top price when selling a business.
It is important to make sure that your customers and clients
remain with the new owners. No customers... no sales…. no business!
When selling
one of my businesses to a senior banking executive, I remember
a comment he made just before signing the sales contract. It
was something like this:
"I have seen so many people pay top
price to buy a successful business, rush in and change everything…
and then lose everything."
He added, "You have happy customers, are making lots of sales
and are running an extremely profitable business. You must be
doing something right. I am not going to change anything, probably
for at least a year, or until I find better way to do things."
He kept his word and the business continued with happy customers,
lots of sales and continued to run profitably. Eventually he
did make changes, but he did it from a position of knowledge...
and with understanding of the market requirements. A smart cookie!
However, it is not always like that when selling a business.
The new owners may not want you involved. This is something
you need to be mentally prepared for.
Don't automatically assume there will be a place for you, even
in a part-time or consulting role. Regardless of your ability,
the new owners may not want you to be involved after the sale.
A new broom sweeps clean. The new owners could see you as a
threat to the vision they have for the business. The new owners
may pay you top price, but still not want you involved after
the sale.
Naturally, when things go wrong, it is likely you will be blamed
for charging a top price and selling them "a dog."
On the other hand, the new owners may want your help before,
during and after the sale. They may want your experience and
full support during the changeover period. They may even want
you to stick-around after the sale until they have come to grips
with their new venture.
Here's the good part. The new owners may be prepared to pay
you a top price for this valuable input. The level of support
you offer after the sale will need to be negotiated as part
of the sales contract.
You, on the other hand, may want to cut your ties as quickly
as possible after take-over date. I mean, let's face it - selling
a business could represent the end of a long drawn-out sales
process. You may just want to cut your ties and move on, in
which case you may not be able command a top price.
So there you have it. You'll need to think about the likely
needs of your business
buyer and mentally prepare yourself for the different scenarios
before, during and after the sale.
Your level of on-going support may help you to get top price,
if you are able to make it a key bargaining chip, in your biggest
sale ever!
Noel Peebles is author of the best selling business ebook "Sell
Your Business The Easy Way"
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