How To Sell Your Business
To most, it would seem that selling a business is like in the movies, simply spending an afternoon exchanging details and getting someone to sign a contract. However there is so much more to this transaction than a quick squiggle on the dotted line. Today I’ll be talking you through the BCMS infographic during their step by step guide to making sure you can get through all the crucial stages, whether you’re thinking of selling your fashion brand, to handing over a website that could make profit.
Here’s a couple of reasons why it could be super handy:
You could be finding a new adventure in life, and met someone who you completely trust to carry off the name. You could be that lucky person who won the lottery and wants to retire from work completely, or feel like you’re in a comfortable situation where work is no longer required. Cashing in on their capital could also be a handy reason to sell up shop.
One of the biggest reasons why I believe people sell their businesses is because they’ve developed it into a massive money making business and their skillsets have outgrown the business. So why not put it into someone else’s hands and have them flourish it for you.
Tip: Before selling, a business owner should commit to putting their company on the market, they must first consolidate their reasons and question themselves why it would be a positive movement.
Why sell your business?
Spend a few months prepping
So before you jump the gun and decide to hand it all over, here’s a few things to consider in your preparation.
The need for the services and technology they offer - can it be developed by someone else, or improved upon?
Will it fit into the current social and political events of today?
Is there competition and a demand for the service?
As you can imagine it’s a time consuming plan you need to come up with, that is recommended to take at least 3 months - so make sure its worth your time and an offer the customer cannot refuse. BCMS have suggested the five most important things a business owner needs to go through when it’s time to wave goodbye their business and exchanges hands with a new owner:
Identify the businesses USP’s that will appeal to a potential acquirer.
Do some market research to gain industry intelligence
Recruit an expert to help with legal advice and due diligence.
Get your paperwork in order (deeds, intellectual property, contracts and agreements)
Don’t take your eye off the ball - stay focused on business growth and continue to run your business as if you weren’t going to sell!
As important it is to create a pre-selling plan, consider the buyer itself and how they’re going to carry on the name.
Acquirers have many reasons for buying an existing business rather than starting one up. Take Nasty Gal and Boohoo for example; Boohoo bought up global sensational brand Nasty Gal because it’s been the go-to fashion brand for some years and Boohoo can benefit of the knowledge and reputation of Nasty Gal. Think smartly and don’t just hand over your business to someone with a lack of smarts.
Here’s a few reasons why having an existing business can be the most beneficial to an acquirer:
It’s an ongoing concern with existing revenues and cash flow
A brand has already been established - there’s much less marketing, branding, business planning and a household name with standards.
The benefits of a pre-existing contact list in the sector or region.
Employees have already been trained.
An existing base of customers.
Buying an existing business removes “barriers to entry”, which is particularly important in a hard-to-enter or specialist market
Access to new geographic.
Find the right buyer
Create a plan after it's signed off
Have a plan of action after you sign your business away.
Although it might seem like a great idea to pop some bubbles and celebrate - there is actually a post sale plan that needs to be in order. You should go ahead and create a post-sale plan and it might be worth investing into a financial advisor to keep your head above water.
There’s tons of different options you can delve into including keeping your chair within the business as a company director or mentor. You’ve built up all this knowledge about your own business, so it would seem sensible to keep an eye on it. Whilst other options include setting up an investment or fund towards the business.
Whatever it is you plan to do with your business, keep this page at hand when walking through the various chapters so you’re always on top of the business and make the most from every positive situation.