There are many reasons why you might want to sell your Michigan business. You might want to retire. You might want to pursue other opportunities. You might want to cash in on the value you have built up in your business. Whatever you motivation is, it pays to be informed.
Some of the statistics surrounding selling your business can be overwhelming:
How to differentiate your business from the pack?
The statistics on deals getting done will only be exacerbated by the number of businesses that will hit the market increases. The number of buyers will likely not increase as the number of sellers does. This makes it that much more important for you to differentiate your business from the rest. The way you do this is with planning.
You may be one of the lucky few that sells without planning. Even if you part of this small group, you likely will not get the best deal possible and will have to take on more risk in order to complete the deal.
You may feel like at this juncture in your life it is pointless to try and sell your business. Even though your business might not be a sellable asset right now, does not mean that in the next 5 years or less your business can't be turned into a sellable business.
The first thing you need to do is decide. Decide that you want to sell your business. Decide that its time to stop putting off the future. Decide that you want a better outcome then just turning off the lights one last time and locking the door behind you.
Common Mistakes When Selling Your Small Business
Mistake #1: Lack of Planning
Having a plan is crucial. Not only does having a plan give your business a road map for where its going, it will also give you an opportunity to correct problems with your business that might otherwise go unaddressed. Think about getting your house ready for sale: a lot of those little projects get done leading up to it being listed for sale.
Mistake #2: Over Valuing Your Business
Many business owners are so ingrained in their business and have sacrificed so many things over the years, they believe it to be worth more than it is. Even buyers that express casual interest in the business will quickly see its not worth negotiating for very quickly. Working with professionals with transaction experience can give you a realistic valuation of your business but can also devise means to increase that value before the sale.
Mistake #3: Lack of Experience
Even an active entrepreneur may only buy and sell a handful of businesses throughout his professional life. Many merger and acquisition professionals will handle more transactions than this in a year. A business owner that believes they not only know how to prepare their business for sale, list it for sale, negotiate a deal and close that deal on their own are likely to be disappointed. There are so many businesses listed for sale that savvy buyers blow right past those that have glaring issues, are incomplete or that do not catch their eye.
Where To Start Your Journey of Selling Your Business
The Business Law Group offers some great free resources for business owners who are interested in selling their businesses. Check out as many as you want.
Its fast. Its free. And it will give you a score on how ready your business is. Start your free business evaluation right now.
Free Book On Selling Your Business
A free book that will give you an insiders guide into selling your business. Pick up tips on what buyers look for and how to prepare for a transaction.
There is nothing wrong with a business owner that wants to be aggressive. Big visions and bigger dreams have lead to many successful businesses. Often frustrated with having to deal with payroll, website design or networking events, some business owners want to focus on growing big and fast. Your motivation is getting the biggest multiple and seeing the EBITDA rise quarter after quarter.
Running your business in this manner takes a special type of counsel. You need to move fast and take on risk. Waiting around for weeks for documents or review of contracts is lost money. There is always some level of risk when you are growing fast. You counsel who can help clean things up along the way and not someone who is telling you that you can't move forward or slowing deals down with massive redline changes.
You probably have a very clear vision of the big picture, you know where your business is at and you know where it needs to go to achieve your ultimate goal. Having professionals around that not only see your vision but make the path to make that vision a reality a priority in their service to your business can be vital. Ignoring potential issues or hoping you get lucky and nothing comes up, should not be your strategy. You need to find an experienced professional that fits what you need.
Some business owners are motivated by leaving a lasting legacy. They want to see their children take over the business some day, they want to preserve the culture and business for the sake of their employees or they want to leave a lasting impact on the community that has supported them. This vision of what you want your business to be is achievable but it does not happen by chance.
One of the big focuses for a business owner with these types of visions for their business needs to be on the next generation owner. Who is that person? What does your business need to look like to help ensure that person is successful? What skills does that person need to have to make sure the business is successful after you are not there? What steps need to be taken to get your business ready? If that person that will be taking over is internal in the business, what training and coaching do they need? If the next owner is outside the business, how do you find and attract them? These are just a few of the questions that need to be considered in order to preserve the legacy you want for your business.
It can seem overwhelming, especially with all the typical work you have, but with enough time, small steps can achieve big things. The first step is sitting down with an experienced professional and getting started.