Part 1 – The End Game – Selling Your Business?

Business Sales on May 31st, 2012 Comments Off

Before you talk with friends, family, mentors, accountants etc, the first person you need to talk to is yourself.  Selling your business is the most important single financial transaction of your life – even more important than your home.  You need to have it clear in your mind as to why you want to sell.  Once the decision has been made to sell, you need to change hats and look at your business from a buyer’s perspective.  Selling your business is much more than a transaction – it is the end game.

How many times have you watched your favourite sporting team come so close to beating the top of the ladder team to only make a few mistakes in the last 5 minutes of the game to lose.  That 5 minutes is equivalent to you selling your business.  Everything you have achieved to date comes down to the final 5 minutes.  The sale price achieved, how quick it sells and the conditions placed on the sale are all going to occur in that small amount of time.  Your business may be entering its 10th year of operation, but it could be sold within 3 months.  It is scary to think this only represents 2.5% of the total business life but it influences a lot of decisions you make going forward.

Do not get me wrong, the end game of selling is very important, however it is just that, the final stage.  To get to this stage you have had to step through all the other phases which will influence the end game.  Once you make the decision to sell, from that point on, you should be preparing for the end game of selling.

So what should you do to make your business ready to sell.  Simple.  To receive the most value when you want to sell, do everything you should be doing
anyway to make your business more successful.

If you are a buyer and comparing two like businesses – which one would you consider more valuable?   The business that requires the owner to be present all of the time or the business that allows the owner to take holidays whilst the business still operates.  The business that has documented all procedures or the business where all the knowledge is limited to the owner.

The market plays a role in the price you achieve, however what influences the sale price and time to sell the most is how presentable, desirable, marketable and financeable you make it for buyers.  So when you have made the decision to sell, you need to begin working toward the end game and the price achieved is
dependent on how well you play that last 5 minutes.

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