The article will be useful to small business owners who are thinking about selling it but do not know how to do it and where to start.
Scheme for the Safe and Profitable Sale of a Business
Modern literature teaches us that it is necessary to prepare in advance for the sale of a business. Surely many have heard stories about how an investor appears out of nowhere, ready to immediately buy a company. We admit that this happened several times, but mostly it is fiction or an embellishment of reality. The truth, proven by many years of experience, is that selling a business requires long and careful preparation. What is hidden behind the concept of “preparation,” and what steps should the owner take in order to sell the business at the best possible price, we will talk about this in the article below.
Three or five years ago, the market for the sale of an existing business in the country did not seem to exist. Of course, enterprises were sold and bought before, but the volume of transactions was extremely low, and most of the most attractive assets were sold and bought behind the scenes. Moreover, so much so that the necessary market information had to be collected bit by bit literally, there was no question of pre-sale preparation (which significantly complicated the life of the new owner), and pricing was very far from a truly market one (which, in most cases), infringed upon the interests of the seller.
You should, first of all, clearly articulate the reason that prompted you to make such a decision and determine whether it is worth telling the buyer about it. One situation where the motives are related to your personal choice, for example, if you are planning to change the field of activity and open another enterprise. Or you want to retire altogether. In this case, the expected question of the buyer can be given an exhaustive and frank answer. However, in any case, one or another sign indicates that the capabilities of the enterprise in any area are limited. This may concern:
- management systems;
- tangible assets;
- promotion of products;
- organizational processes.
Which Are Five Useful Tips for a Successful Business Sale Transaction?
From a legal point of view, support for business purchase and sale transactions is a complex legal task, each stage of the solution of which requires not only a deep knowledge of civil law but also significant practical experience in conducting such transactions. In this case, one cannot do without a lawyer who has successful experience in legal support of business purchase and sale transactions. Among five useful tips for a successful businesses sale transaction are:
- Formulate common goals for shareholders and management, who should have a common vision for the sale process.
- Selection of a team of M&A specialists. Complement the strengths of your company with an experienced team of professionals.
- Business automation. The less a potential buyer spends time and needs competencies to manage your business, the more expensive it can be sold.
- Expectations of demand and market dynamics. Business in the temporary (trend) market is cheaper than business in the market of stable demand.
- The main objective of the buyer is to complete a secure transaction to acquire an existing business that has a corresponding value for him.