Strong Start
You have hired a business broker. You have followed his advice and organized and presented your books in the right way so that the best possible valuation has been achieved. He or she has listed the business for sale on the multiple listing service. He/she has put the alerts out and contacted his list of possible buyers to give them a sneak peak at something good. You’ve done it all right.
Now what?
How long does it take my business for sale to close?
It averages 6 – 8 month, optimistically, to sell a business. There is a lot to be done on the buyer side that can take time:
- Industry Research – if the numbers entice the buyer but they are not familiar with the industry
- Opportunity Research – this is where the buyer looks at what he or she thinks they can do with the business that you the seller have not already done. (This can be considered part of due diligence.)
- Due Diligence – the buyer, plus their team which can include an attorney and an accountant and other specialist
- Securing Financing
- There may be a Visa (E2) application to take place
The more people there are involved in this process, the longer it takes as it depends on third party availability. And this is why you hire a business broker – so that you don’t get bogged down steering this process. You can get on with running your business making it into an ever-increasing-value asset.
Another reason to hire and work closely with a business broker is to avoid costly mistakes. It is tempting to fall into a “last week of school” mentality whereby the little things start to slide. Watch these and the you will leave no money on the closing table through any fault of your own!
Keep Up Appearances
Now that the business is listed, you may think things are up to the broker, now. But just like with residential real estate, the seller has to keep things up to date, and well maintained to initiate and sustain a positive initial impression. The first impression may be a buyer just driving by the buisness to have a quick look. Don’t count out all of the online research and exploration that can be down nowadays. After all, if you were considering buying a business, you’d check it out, wouldn’t you?
- Exterior and Interior Keep the business neat and tidy. You want to survive “the drive by”. Plus, you never who is checking out the business when.
- Digital – Social and Blog and Website – today’s buyers tend to be computer savvy. They will check out what the online footprint for the company and how professional it seems to be. Further, how actively maintained a blog or Facebook page is suggests how well maintained the business is overall.
- Reviews – You should count on pontential buyers researching how satisfied customers are with the company as part of whether this is a good business or not.
Calibrate and Align
You and your business broker agreed on a set of financials. Now you have to keep them that way (or improve upon them.) You never want to be explaining what went wrong! Remember that the listing for your business for sale will include typical tax return information. More than just gross and net revenue, there wil be cost of good, expenses, salaries, benefits, depreciation and the like. Keep your pedal to the metal so that you do indeed –
- Deliver on the financials you have signed off on with your business broker
- Defer any non-essential capital expenditures
- Defer raises perhaps by offering time or bonuses down the road
- Shore up the company culture so that it can hold together without you, and everyone is clear on the Mission.
- Document all the processes so that there is never a doubt as to “how we do things”
Wean
A common mistake I see buyers making is forgetting that if you sell your business you will not longer be there day to day. Can your business exisit without you? You have to wean your customers off you. A cult of personality business is unsellable. Consider: an interior designer, a hair salon, a family doctor’s office… these all risk losing customers when the main person is no longer there. Here are some steps to consider:
- Take More Small Vacations
- Appoint a 2nd in Command and build that person up
- Allow decisions to be made by people in the business other than you.
- Introduce customers to other employees and nurture relationships between them.
The last thing you want is to sell your business and then have to stay on and work for someone else or the customers all vanish!
With your business for sale, it is tempting to lose heart and “just be done already”! Unless you know the buyer and he is ready to close in 30 days, you have to keep the faith, and maintain your business so that there is the same (or better) value that you listed for the buyer at the closing table. Why waste money, when all you have to do is hold on for a little bit longer?
Photo Credits
Photo 1 – Photo on VisualHunt
Photo 2 – Stock
Photo 3 – Photo by Emrah AYVALI from Pexels