3 Things to Consider Before Selling Your Business

Making the decision to sell your business is a major milestone, and often the result of many years of hard work and dedication. Whether you’re selling your business because you’re planning to retire or you’re ready to make a career change, it’s important that you take things slowly. Rushing into the process can be disastrous without proper planning, and someone could find themselves facing missed opportunities, regrets, and even financial struggles.

If you’re in the process of selling your business, or you’re considering doing so soon, here’s what you should consider first:

Know Why You’re Selling

The first thing you should do is understand what your motivation is for selling. In other words, what’s behind the intention? Is it because you’re ready to retire? Maybe you’re bored of your current project and ready to tackle something new. This won’t just help you have a better understanding of the next steps, but it will also avoid problems with the buyer. 

Often, buyers want to know why you’re exiting, and your answer will influence their decision on whether they buy or not. In other words, you don’t want to give the impression that you’re selling a sinking ship. You must have a legitimate reason as to why you’re walking away—otherwise, it may dissuade potential buyers from signing anything.

Get a Professional Valuation

Sure, you may have a certain number in mind, but it’s important to ask yourself whether it’s realistic. Getting a professional valuation means you’ll have a true sense of what your business is worth—not based on guesstimates or estimations, but based on comparisons, industry trends, and factors like revenue and profit margins. 

The better you understand your company’s financial health from a totally objective standpoint, the more equipped you’ll be to price your business fairly. A fair price ensures better chances of smoother negotiations and fewer problems overall during the selling process.

Consider Impact on Employees and Customers

Remember, you’re not the only one that you should be thinking about during the process. Selling your business also affects not only your customers but also your employees. It’s important that you consider how you plan on communicating the sale with your employees, and how you plan on reassuring not only them but also your customers. 

Think through how you plan on communicating the transition, and consider what you want to include in the conditions. Are you planning on maintaining things just as they were, or will existing contracts change? 

Preserving positive relationships and continuity can be just as important when selling your business. The idea isn’t to burn bridges and walk away, but rather to walk away knowing that you did the best thing for everyone.

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