Selling a business is a significant endeavor. It's not easy for an investor, business owner or entrepreneur to one day up and say, "I want to sell my business." In many cases, these business owners sunk quite a bit of time and treasure to grow their businesses. Why on earth would they want to sell it? This is a question that entrepreneurs usually spend hours and hours — if not days — agonizing over. Some thoughts that may go through their mind during times like these?
Are there too many uncertainties in this deal?
Is the estimation of value correct?
Am I exiting the market at the right time?
How do I guarantee I get what my company’s worth?
Put yourself in the right mindset
Growing a business from humble beginnings to the point where it commands a decent value is not easy. Nor does it happen quickly without an extraordinary stroke of luck. It takes a lot of time, grit, money and effort. For many small- to medium-sized business owners, selling their company is somewhat akin to selling a part of themselves. In the end, for a business owner to feel comfortable selling their company, they need to sever the emotional bonds they have with its growth and see the sale through an objective lens. They must take their feelings out of it and view the sale almost as an observer.
So, what's the first step in doing this? Conducting your due diligence and immersing yourself in the sale may be just the trick. And considering half of all sales fall apart during the due diligence phase, it's an important step. Examine the factors that go into a sale before even putting the business on the market. Ask yourself all the necessary exit questions and answer the questions before you even start. Still, what factors are the most important ones to consider when selling your company?
1. Consider what comes next.
The thought of selling a successful company for a significant sum of money carries great appeal. However, instead of just thinking about the money, consider what your next action will be. Have you put any thought into what you'll do after you sell your business? What are your passions and hobbies? Are you done working? With over 90% of all business owners having their net worth invested in their company, these are all appropriate and necessary questions. The most important thing is to make sure you have some kind of plan before selling your life’s work.
2. Assess personal and professional readiness.
Sure, this may be just the deal you've been waiting for. You’ve taken a long time to build a successful operation and you're rightly proud of it. And through all this time you’ve sacrificed family, friends and personal time. So, now you must ask yourself, are you ready to be personally committed to selling your company to do so successfully? Furthermore, is your company ready for sale? Are there weaknesses you need to deal with first to give buyers more confidence? Do not hesitate to take a magnifying glass to both your internal self and your business to ensure both are ready.
3. Ensure a values match
Consider this: You have built a company that represents a reflection of what matters to you. You would not have built it otherwise. If you want to live and succeed beyond your leadership, you’ll also want to make sure that any new owners share the same values as you do. Consider values through the lens of operating the business, supporting customers and ensuring employees are satisfied and well taken care of. Carefully evaluate any potential acquirers to ensure they’ll continue to maintain the same brand beliefs and mission.
Take Patagonia as just one example of putting your values where your mouth is when it comes to the future of the company. Are you considering selling your company? Here at Pluribus Technologies, we acquire technology companies and find synergies within our portfolio of businesses to spur growth and innovation. Contact us today at 1 (800) 851-9383 to learn more!