The 7 Key Factors That You Must Consider Before You Sell Your Soul To A Business Broker
Once you’ve made the decision to sell your business the next question is likely to be how? Going to a business broker might seem like the obvious route, but before you jump straight in and pay a broker a small fortune first ask yourself this question:
Who is best placed to sell the business you’ve built up over the years?
It must be you, right?
Marketing your business for sale might seem like a daunting prospect at first, but it makes sense that you should use your in-depth knowledge to present your business in the best possible way. And why pay a middleman, who won’t guarantee you a sale but will still ask for fees upfront?
You’ll need some tools in your armoury, but good planning and knowing what you want from the sale will put you in a great position when you hit the market.
Step 1 – Identify your USP
Differentiating your company in its market will make you stand out in the crowd. Is there a service or product that you offer which your competitors don’t? Do you have more experienced staff or methods and training which are unique in your industry? It’s worth taking some time to analyse exactly what you do and how it makes you special.
Step 2 – Do your research
Knowing your sector inside out is what business owners excel at. If you’ve been in your trade for some time, you’ll no doubt know every nuance of that sector, but doing some more digging could throw up some useful insights. Are there any businesses like you on the market already? How are you different?
Equally important is having a good knowledge of your industry, its threats, trends and opportunities.
Step 3 – Have a marketing plan
If you’re planning to completely exit your business, you need to demonstrate that your business can continue without you. Have a written plan, a budget and a calendar of activity which your buyer can pick up and run with.
Step 4 – Define your perfect buyer
If you don’t know what they look like how will you find them and know when the right one comes along?
- Are they likely to be investors in businesses or just in businesses in your sector?
- Do they need to have specific knowledge, experience or qualifications?
- Would they be most likely to be an individual or a group?
- Are they a competitor?
- Do you need to like and trust them?
- Is it important to you that your values match?
- Will they protect the legacy of your business?
Decide who would be the best person to buy your business and then make a plan to find them.
Step 5 – Find your perfect buyer
Where does your perfect buyer hang out? In the same way you might have an avatar of your ideal client, define and seek out your ideal buyer.
- Your network – ‘put the feelers out’
- Potential referrers – your accountant, lawyer, financial advisor
- Industry specific websites and publications
- Online businesses for sale sites
- Direct approach
- Online searches
An avatar is detailed description of your ideal customer and having one will help you to focus your efforts and make your marketing and communications more efficient. You should include demographic/geographic information and challenges in your ideal buyer avatar. When you’re selling, these might include investors buying into a new sector, business owners looking to buy a competitor or an entrepreneur looking for a fledgling business to grow.
Step 6 – Deploy your assets
The chances are you’ll want to keep the sale of your business under wraps, especially in the early stages. The hint of your exit might cause unrest with employees and clients, so most people choose to keep matters confidential. However, effort should still be made to present your business in its best light to prospective buyers.
Your website is your shop window and a core business asset. Fill it with great content, positive imagery and your company’s personality. It’s the first place a buyer will go and those initial impressions matter.
Your Information Memorandum (IM) lays out the factual company details. Any serious buyer will investigate the business further, but it should contain:
- A strong headline
- Business sector
- Contact details
- Photos where possible
You might also produce a teaser giving the top line facts and inviting a buyer to look more closely at the opportunity. Be descriptive, specific and positive in your marketing materials and take care to maintain confidentiality throughout.
Step 7 – Know Your Greatest Asset. You.
You are your best marketing tool and your company’s greatest asset. Many acquisitions now involve the business owner remaining in a reduced capacity or as a consultant and this appeals to buyers. It makes the handover smoother, reassures employees and demonstrates that you and your buyer have each other’s trust. It also makes the transition easier for you, because there’s no doubt that this can be an emotional process. Suddenly breaking away can be too much of a wrench for some.
At Fidelis, we work with business owners who are looking to exit their business. Our experience, coupled with our core values, means that we can offer stress-free solutions which are win-win for all parties.
We offer what we term as a ‘glide path’ exit, so we’ll work with you to grow and enhance your business together until you’re ready to leave and we’re ready to buy.
Wherever you are in the process, for a confidential, no obligation discussion please get in touch now.
Telephone: 0161 410 7070