As a business owner, you may have the mindset of starting a business that will be profitable for you in the long run. Some business owners though, prefer to start a business with the possibility of selling it in the future. There is nothing really wrong with this type of mindset, but you just need to remember that there is no generic formula when it comes to this. As a business owner with this type of mindset, you must need to know a few things in order for this venture to come out successful.
Putting up a business for sale might sound easy enough like starting it up and then putting up a ‘for sale’ sign then expecting potential buyers to come knocking at your door and offer you a big wad of cash. If it was that easy, then everyone else would have done it. Honestly, it takes more than that to sell your business; it also involves a lot of planning and patience.
Here are some tips on how to make that business more sellable.
Don’t Start a Business that’s only Set for Short-Term Hauls
Starting a business with only the notion of making short-term, quick money is a no-no. This business strategy of quick expansion and then quick selling often exhibits weak business fundamentals as sustainability is often disregarded. Always keep in mind that business buyers will always look at strategic reasons to acquire your business. No business buyer wants to get something that goes stale given a few months or years.
Don’t Start a Business that’s Highly Dependent on Your Skills
Business buyers often look at the stability of the process instead of dependability on key personnel. You can get a higher premium if you have documented processes that are not dependent on certain skills of personnel; like yourself, for example. Having a ‘plug-and-play’ type of business makes it even more attractive to a buyer. To ensure salability of your business, make sure that it will still operate even though you’ve already walked away from it.
Take your Time
Like what was mentioned above, selling a business requires patience. It may take years to make sure that your business has as much of the factors that potential buyers are looking for. Some of these factors include sustainability, protected intellectual properties, profitable client contracts, patented processes or technology, and solid infrastructures. You cannot get these things in your business overnight. Moreover, these are the goals that each business, whether it will be for sale or not, tries to attain.
Involve a Broker or an Investment Banker
Even though selling your own business is doable, you might want to let the brokers handle the negotiations. These negotiations can be distracting, tiresome, and even emotionally draining. With these distractions in play, it will be easy to lose focus of running your business. Losing your focus would then equate to a struggling business. As an end result, a struggling business is not very attractive to potential business buyers. Given their expertise, brokers can handle the negotiations well for you and can even give you more favorable terms from the potential buyers.
Always Get Multiple Bidders
In selling your business, always make sure to get different bidders. These bidders, depending on their interest in your business, would likely wage a bidding war against each other. If this is the case, you would always be the winner as you can get a higher final price for the business.