If you’re thinking of selling your business, here are a few key tips to keep in mind:
Identify the right time to sell.
- When your business is doing well. Profits are up, your customer base is growing and the future is looking bright for whoever buys it from you.
- There’s an upswing in the market. Is your particular market getting hotter? It is becoming more popular? Is demand increasing? Ride this wave to a profitable sale.
- When you aren’t having fun. If your heart just isn’t in it anymore, this is as good a time as any. Your attitude toward the business could end up affecting profits and growth without you even realizing it. Better to quit while you’re ahead.
Create a valuation range.
- Potential buyers are either looking for profits or potential. Between the two, it’s easier to sell your business if it’s already established and turning over a consistent profit. Potential, on the other hand, is more difficult to quantify. Convincing buyers that your business has potential to turn a profit is more of an art than an exact science. Emphasize any positives you can think of to support your claim.
Identify possible buyers.
- If you’re selling profits then you will want to approach other entrepreneurs. This can include competitors, vendors or even an employee who can buy it out from you over time.
- If you’re selling potential, then you’ll need to get a little more creative in finding potential buyers. You’ll want to approach a strategic buyer who will bring something to the table that you don’t already have as you’re selling. Try and paint a picture for this strategic buyer that illustrates all of the assets they’ll acquire and how these assets will complement whatever they’re bringing into the business.
Whether you’re selling profits or potential, just remember that any business can be sold. There is a buyer for every business, big or small, it just boils down to realizing your valuation range and finding the appropriate kind of buyer who is excited to take things to the next level.
Anna Barber, Strategy Coach at AnnaBarber.com, offers tips on how to identify the best time and ways to sell your business.