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VIDEO AND PODCAST
SERIES
Are You REALLY Ready to Sell Your Business?
Plum Pointe Wealth Management President Brian Dunckley shares his experience helping businesses prepare and assess their readiness to sell.
Watch the video or listen to the full audio episode here or on your favorite podcast app.
ARE YOU READY TO SELL YOUR BUSINESS?
Selling a business is one of the most complex decisions you will make as a business owner. If you have considered selling your business, now or in the future, these seven steps will help you ask the right questions to make the best decision for your business.
1. IDENTIFY YOUR GOALS AND OBJECTIVES
Be clear on what you are hoping to gain from the sale. Where would you like to land financially? Ideally, how will the sale impact your employees, your family, any charitable or local organizations you support? Once you identify the most important goals, you can work backwards to determine what processes you need to put in place to ensure that each of those goals can be met.
2. OBTAIN AN OBJECTIVE VALUATION
Once you identify the ideal financial conditions for a sale, you need an objective assessment of the value of your business based on the current market. This can help you determine if now is the right time to sell, or if you need to take some steps to increase the value of your business before you start the sales process.
3. INVOLVE KEY EMPLOYEES
If any of your current employees are integral to the continued success of the business after your departure,
confirm their willingness and requirements to remain with the company following the sale to ensure a
smooth transition.
4. ASSEMBLE A TEAM
You’ll need advisors outside of your day-to-day operations with expertise in the process of selling a business from contracts to negotiations. That team should include a deal attorney, deal accountant, and financial advisor with wealth management experience. When you’re liquidating assets, you need to know how to maximize your assets to maintain your lifestyle, care for your family, manage taxes, and more. In some cases, depending on the size and complexity of the business, you may also need to hire an investment banker. Identifying the right team of advisors and garnering smart advice is crucial to a sale that meets all your objectives.
5. GET ORGANIZED
Tighten up all of the financial and business documentation that a buyer is going to want to see. Maintain a clear record of any outstanding loans or bills. Determine your role in the company after the sale, whether there is a need or requirement to stay on for any duration and your willingness to fulfill such a requirement.
6. TELL YOUR STORY
Be prepared to share the personal story of your business. A story that resonates with a buyer will include how your business came to be, challenges and milestones along the way, and some details about the people you serve and employ. Talk about the value of your product and your team. Give concrete examples of customers who’ve realized that value. The more you can fill in that gap and create that story, the more likely you’ll be able to maximize value when it comes time for negotiations.
7. FIND THE RIGHT BUYER AND MAXIMIZE YOUR SALE
A strategic buyer understands your business. You may need to hire an investment banker to help you identify a strategic buyer, but not necessarily. Once you identify a buyer, you’ll prepare a letter of intent which identifies sale terms. This is when the most intense due diligence will come from the buyer and it’s the part in the process where it pays to have a team of trusted advisors on your side. Lean on your team to maximize the value of the sale.
If you’re considering selling a business or think you might be ready, contact us today. We can line up resources to get you started and help you address the sale from every angle.