Selling your business
Thinking about selling your business but not sure how to? Let us help. We understand that the intricacies of business can be complicated, that’s why we think it’s essential to develop your knowledge beforehand so that you don’t get caught out and lose out on getting the best deal.
There are a few things to know about selling your business, including:
- Business valuation
- Responsibilities to staff
Before diving in at the deep end, it’s essential to understand what your business is worth. You don’t want to end up underselling something you’ve invested so much blood, sweat, and tears into.
What is a business valuation?
A business valuation determines what your business is worth and can be subjective as the value will be different for different people. Primarily, the value will be determined by what the buyer will get in return for what they pay for your business – for example, what sort of profit will be made and what are the risks? If you’re still confused, don’t worry, we understand and are happy to help.
Preparing to sell your business is critical; the perception your buyer has of your business will be a crucial factor as to whether or not your business is a good investment for them. You need to know your business inside out: the profit you have made, what you think it will make in the future, what assets your business has to offer – the works. Not knowing your own business gives a bad impression and can impact the likelihood of the sale. Astute investors look for entrepreneurs that have a great business opportunity. A project that is perceived to be messy can be off-putting. Prepare your answers to potential questions ahead of time to avoid any awkwardness.
This works both ways – don’t be afraid to ask the buyers questions too. You might not want to sell to someone whose values vastly stray from your own, especially if your loyal staff are being sold with the business. It pays to understand a potential buyer’s goals, vision and, most importantly, why they want to buy your business. Also, understanding a buyer’s driving factors will come in handy at the negotiation stage later on.
It’s also important to anticipate any issues about your business that may be asked about – it’s important to offer solutions. Explain any problems that have arisen in the past or are currently a problem, and say why you think something is happening and how it could be fixed. You do of course need to be forthcoming with these so it’s best to be prepared and be truthful than to try and cover up past mistakes. We are all human after all.
Now that you have found a buyer who is ready to buy, that’s when the fun starts. The negotiations. It’s essential to be flexible and open to discussing different offers. Most importantly, however, is to believe in yourself and the business; if you don’t sound convincing, then potential buyers may become disinterested.
Responsibilities to staff
How does selling your business affect staff? Will they continue with their jobs or will they be required to leave? What assets are being bought? Is the buyer simply buying into the brand and the services? Are they taking over a rental lease? Is furniture staying with you or going? What is happening to your staff? Are you giving away social media rights? These questions are essential and if the staff are not a part of the sale, it’s essential you talk to them about why and organise redundancies.
We take pride in helping you before, during, and after the process of selling your business. At Big Hand we ensure confidentiality, maximise the value of your sale, and, most importantly, support you throughout the entire process. Still unsure and would like to better understand the selling process? We’d be delighted to help. Get in touch with us today on 0161 327 2911. Looking to start your own business instead? We have you covered there too.