Failing to plan, is planning to fail.
Perhaps you’ve heard of this saying before. It’s certainly a fitting phrase when it comes to selling a business.
You see, the day you think of selling your business, should NOT be the day you run out and list the business for sale.
The day you think of selling your business should be the day you start making a plan to sell your business.
Let me explain…
For many business owners, deciding when they are ready to sell their business is a big decision – I get it. It can take years before the owner is comfortable with the idea, but once that mental decision has been made, many simply run out and list their business for sale.
No planning has been done.
No preparation has been done.
It’s a terrible mistake that repeats itself time and time again. It’s a mistake that’s going to make the whole selling process extremely stressful for these business owners. It’s going to rob them of time and it’s going to rob them of lots of money. It’s a mistake every business owner regrets, with very few exceptions.
Let’s talk about the right approach to selling a business.
The moment you start thinking about selling your business should be the moment you should be making a plan. In order to have a proper plan you need to hire a suitable advisor. Not an accountant, not a lawyer, but someone who has hands on experience buying and selling small to medium-sized businesses.
An advisor who can show you how to sell the business for the highest possible price.
An advisor who can show you how to put more money in your pocket.
An advisor who can show you how to build a sellable, financeable, business.
Yes there is a cost to hiring such a business advisor, but consider all the advantages:
- You’ll be adding real VALUE to your business.
Value a serious buyer is prepared to pay for! And to quantify this: for a small businesses this might be tens of thousands of dollars. For a medium-sized business it could be hundreds of thousands of dollars.
- You’ll have a business that will attract multiple offers from serious buyers.
Unprepared businesses may attract a lot of tire kickers but they will be very lucky if they even receive one offer.
- You will reduce the amount of time your business is on the market by months.
Prepared businesses can sell within 3 months – I know, I’ve done it.
By comparison, an unprepared small straightforward business might take 6 – 9 months to sell. An unprepared medium-sized, more complex business can take 12 months or even longer to sell!
- You will be reducing your tax implication by up to $180,000 (per shareholder)
I say per shareholder because I meet a lot of business owners whose accountants have not optimized the opportunity for the business owner (or their spouse) to claim such things as their Lifetime Capital Gains Exemption.
- You will significantly reduce the amount of time a buyer would want you to stay on after the sale of your business.
If you and your business are unprepared, you need to expect to stay on with the business, after the sale for a long time. The average is 3 years! Proper planning and preparation can reduce this time to a matter of months.
I hope you can see, with the right help, here are incredible benefits to properly planning the sale of your business.
The alternative is you do nothing. No planning, no preparation but to be clear, with that approach there are only going to be three outcomes:
- Your business will not sell.
- Your business will sell for a fraction of what it could have been worth.
- Your business will sell but the sale purchase agreement will be complex and undesirable.
Let’s think about that for a minute.
Let’s review and summarize the discussion.
Planning means taking the necessary time to prepare yourself and your business for a sale. It means hiring an expert, an experienced consultant who can help you properly prepare your business for the sale. The advantages of making a plan are clear.
Making a plan is the only way you’ll sell your business for the highest possible price, and the only way you’ll put the most money in your pocket.
Please please, you owe it to yourself, to your family, to your employees and your business, to properly plan the sale of your business.
Thank you for taking the time to read my article on How To Sell A Business For The Highest Possible Price!
Matthew Buxton – Business Broker, Author & Advisor
If you enjoyed reading this article and found it helpful and informative, please do take a moment to Comment & Share! Doing so really will help me get my message out to other people just like you, who are searching for such expert advice.