In This Episode
Is it time to sell your company? What does it even mean to be ready to sell your business? I mean people talk about it like it’s common knowledge or something. It’s to the point that you almost feel silly asking the question.
How many times have you heard people say, “I got an offer I couldn’t refuse?” What would that offer look like for your business? How do I even know if I have something worth selling?
Here are some of the key things to consider when looking to sell your company:
- Right Buyer: you need to determine what the “right” buyer means for your business. Is it the person willing to pay the highest price? Someone who will keep all your employees and will be a good long-term place for them to work? Or something in between? There are a lot of options out there and if you’re not careful, you might unwittingly sell your business to the wrong buyer. This can be one of the most emotional pieces of selling your business, making sure your “baby” lands in the right spot.
- Price: while you don’t need to have an exact price in mind, you should have a number in mind that would make things hard to ignore or the “offer you couldn’t refuse!” There are lots of ways to get a sense for what your business is worth starting with getting to know what other companies like yours sell for and how they are valued. Some buyers will only look at your sales figures when determining value, but most will look at some version of cash flow. So be sure you have a good handle on just how much cash flow your business produces. This includes all the expenses you run through the business (e.g. vehicle expenses).
- What’s Next: this probably sounds silly when you’re up to your eye balls in all the things going on in your business, but what are you going to do after you sell? And after you “take some time off” or “do some traveling” or whatever the floating thoughts you’ve had about life after selling your business. How are you going to stay relevant?
Chances are you’ll only get to exit a business once so you want to be a little more strategic about it than just waiting for the right person to show up. If you’ve got a good handle the above 3 items, then you’ll be able to engage someone to help you go sell your business. If not, you might be waiting for a while or responding to all the wrong offers.
People, Companies and Resources We Mentioned in the Show
- Wall Street Journal (www.WSJ.com)