5 Things To Do When Selling Your Business
So, you have decided that you are going to sell your business? Perhaps you simply no longer have the passion and drive required to run your business anymore? Maybe you are ready for retirement? Perhaps you want to move abroad and start a new adventure? Irrespective of what applies to your current situation, there is no denying that selling a company can be complex and a bit overwhelming. With that being said, read on to discover five of the important things you need to do when selling your business.
Put together an exhaustive letter of intent – When putting together this letter of intent (LOI), you need to make sure that everything you care about is featured in it. A lot of sellers often make the misjudgment of thinking that only the ‘big picture’ view of the deal needs to be incorporated, but that is not the case. You will often face deal erosion if your LOI does not have the required details and items.
Separate different lines of business – You can experience a distortion with regards to value and marketability if you try to assess a multi-aspect company as a whole. This is why it is often a wise idea to separate different lines of business, as a buyer may not be interested in an integrated whole with various divisions.
Hire the right people – When it comes to selling your business, you need people that you can trust and you need experts that have worked with companies of your nature, size and structure before. If you are looking to cash in and sell your IFA practice, for example, then you need a company that has a vast knowledge of the financial advisory market and the sort of people you are going to be targeting.
Have a solid post-sale personal financial plan – For most people, their business is their most valuable asset. Once you have sold this, you need to think about your financial status afterwards. What are you going to do with the proceeds? How are you going to invest them to ensure you reach your long-term financial objectives?
Get your house in order – Last but not least, you need to make sure that you have everything in order so that you do not experience any hassle during the negotiation phase. This includes all of your contracts, assets, and processes. The areas that tend to require the most attention include intellectual property arrangements, financial reports and records, employment contracts, family ownership arrangements, and the business legal structure.
So there you have it: five of the important things you need to do when selling your business. If you carry out the steps that have been mentioned above, you can give yourself the best chance of making sure that your business sale is a success. You will, hopefully, secure the price you have targeted while also selling your business in a quick and efficient manner.