How to Sell
a Business

Learn what you need to know about selling a business for the maximum value, from your personal and professional preparations to how you value a company, find ideal buyers and handle negotiations.

The process of selling a company can be one of the most emotionally taxing experiences a person can face. But, with the right approach, it can also be one of the most rewarding.

Here, we provide a comprehensive insight into how to sell a business and achieve the optimal return on your investment. Each section is dedicated to the different stages you will take when selling your company, from your mental preparations and determining what your business is worth to locating and negotiating with the right buyers.

Discover the complete guide on how to sell your company.

Why should I sell my company?

Understanding the reasons why you may want to sell your business, the emotions underlying this process, and how to mentally prepare yourself.

Before diving into the process of how to sell a business, you need to cement the reasons why you want to exit your company. This might seem like a simple task – just say “I want to sell my business” and move things forward, right?

But, it is not that straightforward. Countless times our deal teams have gotten to the 11th hour in the process of selling their company only to see the deal collapse because the seller got cold feet and rescinded the deal. Not only is this tough on all parties involved, it is also very dangerous as it typically opens your business up to a range of problems, including:

  • Loss of money
  • Wasting time/focus on your business
  • Confusion for staff and family members
  • Loss of confidentiality
  • Lack of trust from future buyers

So, before you get into the nuts and bolts of how to sell a company, you need to make sure you are mentally prepared to exit. 

Are you mentally prepared to sell your business?

Are you mentally prepared to sell your business?

Business owners are often surveyed regarding their mental readiness to exit their businesses, with as high as 80% in some assessments not being prepared for this moment.

That’s because exiting is a process, NOT an event. The reality is to prepare for this journey to selling a business, you not only need to prepare your company – you also have to prepare yourself for a life-changing event.

There could be any number of reasons why you would choose to sell your business: 

  1. You are burned out from running it
  2. You plan to retire or enjoy more free time
  3. You want to explore a new business opportunity
  4. You don’t have the ability or resources to grow your business further
  5. Your company’s value has grown significantly
  6. Your lifestyle is changing
  7. You’ve received an offer too good to refuse
  8. Your business is struggling financially
  9. You’ve achieved your business goals
  10. You want a fresh start

These are just a sample of the reasons many business owners have cited for deciding to sell. Your situation could echo these or be completely unique, but it’s vital that this reason is clear in your mind throughout the journey of selling your business.

Your exit plan is usually the single biggest financial plan you will contemplate. Most likely you started your business on a shoestring and throughout the years with quite a bit of hard work, you have grown it into a much larger entity that is now worth a goodly sum.

What we have learned over the years is that, as the exit process progresses, the logical side of the brain that has been in charge gradually gives way to the emotional side. Keeping the key motivation for selling your business in focus will help prevent the emotions of selling a business overwhelming your journey.

The emotions of selling a business

The emotions of selling a business

As previously mentioned, one of the biggest hurdles to overcome when selling a business is staying mentally resolute throughout the process. Emotions are obviously going to get involved – this is a transition from the company you’ve nurtured, developed and built to where it is today.

Based on our decades of collective experience in working with entrepreneurs contemplating the sale of their companies, we’ve learned that there are several important areas that need to be examined to mentally prepare a business owner for selling. Consider these key questions before entering the market:

  • Am I doing the right thing?
  • What about my family’s legacy in the business?
  • Am I going to miss my employees?
  • Is this the right thing to do for my customers?
  • Will the new owner respect my company’s place in our community?
  • Is money the most important factor of my deal?
  • What am I going to be doing the month after the deal closes? A year later?
  • Will I regret that my children are not taking over the family business?
  • What would my predecessor say if he knew I was selling?
  • Do I like the new potential owners? Will my employees?

 

Once you’ve answered these questions honestly, you should also consider the following:

  • A financial review – you could overestimate or underestimate the amount of money you’d need from the sale of your company post-sale, so it’s important to discuss this well in advance with your wealth manager.
  • Family preparation – it might not be as comfortable as a Sunday dinner with your loved ones, but it’s crucial to have a series of frank, open conversations about what the sale of your business means for your immediate and extended family.
  • Life post-sale – for many entrepreneurs, owning a business has precluded any hobbies or outside interests. It is better to determine early what you plan to do to occupy this influx of time long before any transaction closes.
  • Another owner – after years of making key decisions, the concept of someone else making other different decisions can be a real struggle. Relinquishing this control when selling a business is key to being happy with the transaction.
  • Answering a new boss – in many cases, a selling business owner will be retained for a transition period post-sale, so you have to determine whether you’ll be comfortable working with and under new management for that period.

These are just some of the emotions we’ve encountered in our work with clients, ranging across different ages, backgrounds, industries and more. As logical selling a company may look on paper, you may be surprised at how some of these emotional questions become paramount when the goal line is in sight. 

The ultimate question, “Why do I want to sell my business?”, generates answers as varied as snowflakes. If you own a company, regardless of your age or intentions right now, addressing these questions early helps you prepare for the inevitability of exiting your company one day.

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When to sell a business

Timing is crucial in the process of exiting a company. Learn how to determine when to sell a business for the maximum value.

There are circumstances where bad timing isn’t a huge deal, like missing a beat while dancing or turning up late for dinner at your folks’ home. But, choosing the wrong time to sell your business can be the difference between realizing the optimal deal or leaving money on the table.

When to sell a business

When to sell a business is just as important as how to sell a business, and only by knowing both can you confidently pursue the maximum value. It is a predominant factor separating the two types of business owner:

  1. Those that PLAN to sell their business
  2. Those that HAVE to sell their business

Only one of these types generally gets the most out of their exit strategy. The other has waited until circumstances have forced their hand, meaning they need to sell, regardless of whether the timing is right or not. This tends to be due to one of the 5 Ds:

  • Death – The death of you, a close family member or key partner in the business could force a sale.
  • Disability – An unfortunate incapacity that means you or another cannot perform their commitments to the company.
  • Divorce – A divorce could hurt your personal wealth, necessitating the sale of your business.
  • Disagreement (amongst partners) – a breakdown in professional relationships could spur an untimely sale.
  • Disinterest (burnout) – waiting until you’re burned out of work to sell could lead you to take the first offer you receive, not the optimal offer.

Not only are these circumstances emotionally draining in their own right, but they can force a quick sale of your company, which puts the balance of power in the hands of the buyer. By establishing a comprehensive exit strategy and knowing the ideal conditions to sell a company, you increase your odds of the optimal sale.

When is the right time to sell a business?

After you’ve determined you’re mentally ready to exit, the next aim is to figure out the right time to sell your business. History has shown us that there are two conditions that indicate it’s an ideal time to sell:

  1. Your business is doing well and making money
  2. When buyers are active

Of course, these conditions don’t often occur at the same time, which makes it crucial to capitalize when they are.

You should be aware of your annual financials, the position of your business and whether the direction is positive. It’s important not to fall into the trap of waiting for your business to suffer to consider selling – even when buyers are active, they will be looking for companies with high potential, not those appearing to be running out of gas.

Buyers are most active during a seller’s market. This is when the economy is strong and the demand for businesses among buyers is greater than the supply of businesses, raising the value of companies. Typical conditions of a seller’s market include:

When is the right time to sell a business?
  • A positive economic environment
  • Low or modest interest rates
  • Low capital gains taxes
  • High cash balances and excess dry powder
  • Strong earnings among buyers
  • A need for M&A activity to stimulate growth

To give yourself the best chance of exiting for the maximum value, understanding the signs of a seller’s market means you can tell when the conditions are right to sell a business.

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Your ‘Selling a Business’ Checklist

Discover the 16 steps to selling a business for the maximum value, including the necessary documentation, expected timeframe, and helpful tips.

Here’s one thing we hope you take away from this extensive guide: the reality is that selling your business on your own, without professional representation, is a long, tedious, detailed process.

What are the steps in selling a business?

Our process of how to sell a business is broken down into 16 key steps, guiding you from the initial analysis of your company all the way through to closing. By completing every step of this “selling a business” checklist, you’ll be on track to exit for an optimal value.

Your Selling a Business Checklist

How to Sell a Business – The 16 Steps

  1. Decision Meeting with M&A Analyst

    This initial meeting with an experienced M&A professional will determine your company’s suitability for going to market. This identifies early your motivations for selling the business and if there are any immediate issues preventing progress.

  2. Business Evaluation

    This stage delves deeper into determining the value of your business. This includes a full review of your company’s financials, establishing any intangible assets, conducting market research and culminates in the development of your Offering Memorandum.

  3. Value Enhancement

    Here, potential weaknesses, risks and areas of improvement are identified within your company that limit its value. This way they can be addressed to enhance the value of your business in the eyes of buyers before going to market.

  4. Exit Planning

    This is where your exit strategy is fully established before entering the market. This will detail your reasons for selling your business and your ambitions for the sale and post-acquisition.

  5. Develop Buyer Prospects

    Here the characteristics of your ideal buyer are determined, and research is conducted to find buyers that best match these conditions. This helps improve the success of marketing your company.

  6. Distribute Profiles

    This is the circulation of your Confidential Business Profile to potential buyers. This is a top-line document created off the back of your Offering Memorandum, presenting the key features of your company without breaking confidentiality.

  7. Get Confidentiality Agreements

    These agreements protect you and prospective buyers from revealing any confidential information about your business before any detailed information about your company changes hands.

  8. Distribute Offering Memorandum

    Once confidentiality has been agreed, this is when you present your Offering Memorandum to prospective buyers. This will include comprehensive details of your financials, company history, clients, suppliers and more.

  9. Buyer Visit

    This is the stage where buyers will visit your business to meet your team face-to-face and get to grips with your company’s operations.

  10. Receive Offers

    At this stage you’ll receive initial offers for your business from interested buyers.

  11. Limited Auction

    This is a targeted auction held between interested parties designed to weed out any unfit buyers and those that don’t meet your expectations. This helps you to settle on the ideal buyer to continue negotiations with.

  12. Negotiate Deal Structure

    Here is where negotiations between the selling business owners and chosen buyers are conducted, outlining the structure of your sale, such as the payment and the timeline for the acquisition to be completed.

  13. Letter of Intent

    These documents set the terms for due diligence and set expectations around deal structure, scheduling and any other key points. Signing this also protects both sellers and buyers with exclusivity and if negotiations end for unpermitted reasons.

  14. Due Diligence

    This stage is where buyers conduct their own examination of the selling business. This is designed to verify that the information presented in the Offering Memorandum is correct and that no unexplained risks are presented.

  15. Definitive Purchase Agreement

    This is the mutually binding contract that sets in stone the conditions for the buying and selling of businesses.

  16. Closing

    This is the end of the transaction, where ownership changes hands from the seller to the buyer.

Learn more about our Selling a Business services

These are the 16 steps in how to sell a business, each of which is vital to the eventual successful sale of your company.

Of course, these are just the headlines for each stage of the exit process – the work involved at each step is very time intensive, and you’ll require skilled support to manage them efficiently and not lose focus on the responsibility of running your business.

By following this checklist and receiving the right guidance, you:

  • Determine and maximize the value of your business
  • Create a plan for life beyond your business
  • Develop the right documentation that buyers will be interested in viewing
  • Locate and negotiate with the ideal buyer for your company
  • Protect yourself legally from any issues that could arise while selling a business
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What documents are needed to sell a business?

As mentioned in the ‘Selling a Business’ Checklist, there are numerous documents that are crucial in the process of exiting a company. Without these, your company is not protected while you sell and it becomes far more difficult to attract buyers to your company.

Here is a breakdown of what documents are needed to sell a business, what information they should include and when they are required by.

Offering Memorandum

Your Offering Memorandum (OM) is a legal document presenting the features of your business that will attract buyers. This is arguably the most important document when selling your business, as it will present detailed information of your company that buyers will want to see before they consider making an offer.

Every company’s OM will contain different information, but a typical example will include the following:

  • Three years of historical financials
  • Five years of projected financials
  • A full description of the company that should include a complete history of the business, its current operations, and future growth opportunities
  • A SWOT analysis on the business (strength, weakness, opportunities and threats)
  • An analysis of the projected growth of your industry
  • A discussion of the key end markets you serve and their projected growth
  • An examination of key clients
  • An analysis of vital suppliers
  • Full disclosure of significant contractual relationships with suppliers/customers
  • A chart focusing on critical employees and their relationship with the company
  • A full list of intangible assets that make the company unique and successful

It is crucial your OM is accurate, as this is what buyers will refer to when conducting due diligence towards the end of the process. While it is undoubtedly tempting to hide any negative information in the hopes this increases your sales price, professional buyers will spot any subversions, which could result in a severe loss of trust.

For this reason, it is highly recommended you reach out to experienced financial advisors and M&A professionals to analyze your company’s financials and create the most accurate, up-to-date and attractive Offering Memorandum possible.

Confidentiality Agreement

Before sending your Offering Memorandum to prospective buyers, it is imperative to have signed a Confidentiality Agreement with the buyers in question. As your OM will contain a great deal of sensitive information about your company’s financials, customers, employees and more, this legally binding contract protects you from any of this information being leaked out.

Confidential Business Profile

Your Confidential Business Profile is formed from your Offering Memorandum, and presents a top-line picture of your business to buyers before any Confidentiality Agreement is signed. This is your opening gambit to potential buyers to pique their interest, containing the highlights you want prospects to be aware of about your opportunity.

Letter of Intent

The Letter of Intent sets the conditions for due diligence to be conducted between those buying and selling businesses. This document sets expectations around your deal structure, scheduling, and other big picture aspects of your negotiations, which helps resolve any potential difficulties immediately. It is essentially an agreement for a future agreement.

Letters of Intent can also act as a means to protect both buyers and sellers. For buyers, they can include a ‘no-shop’ clause that prevents the seller from conducting negotiations with other buyers or continue to market their business while due diligence is completed. For sellers, a break-up fee can be arranged to help prevent buyers cancelling negotiations for any unpermitted reason, ensuring any loss in time, money and effort is compensated.

Definitive Purchase Agreement

The final hurdle in how to sell a company, a Definitive Purchase Agreement is the legal document that records the conditions for the sale and purchase of a business. This includes all terms and conditions for the acquisition, including form of payment, deal structure, termination clauses and earn-out conditions.

How long does it take to sell a business?

Now you know the steps of how to sell a business, you’re probably curious how long it takes. While every process is unique, in our experience working with clients during their exit, on average it takes around 12 months to complete the checklist. And, on top of this, it can take a further 12 months to prepare your business for the sales process, which is why it’s crucial to begin your preparations as early as possible.

Unfortunately for those looking for a guide on how to sell a business quickly, this simply isn’t feasible if you want to achieve the maximum return on your investment. Each of the 16 steps listed above need to have time invested into them in order to make the most of your company’s sale.

This timeline can be reduced by working with a professional M&A advisor to guide and support you at every stage of selling a business. Their knowledge and experience of each step will make these easier to navigate and more likely to be completed quicker than if you attempted them alone.

In addition, you can take steps to ensure your company is as ‘buyer ready’ as possible before beginning the sales process. By taking time to analyze any risks that might impede selling your company early, this will reduce the time needed to identify and address any problems at the value enhancement stage.

3 quick tips for selling your business

To conclude this section outlining the complete process of how to sell a business for the maximum value, here are three further tips you may consider that could benefit how you handle the journey of exiting your company.

  1. Hire an M&A advisory firm

    Above all else, don’t feel like you need to exit alone. Most will only have one chance to sell a business, so can’t afford to be learning on the process. Having an experienced M&A advisory firm by your side means you have knowledgeable support throughout the sale process, and means you don’t take your eye off the ball of running your company during the months leading to your sale.

  2. Keep your sale quiet

    This will depend on the potential reaction of your clients, customers and employees, but it’s best to avoid talking about your company’s potential sale until it is near completion. You may want to share details of the transaction with some trusted personnel early, this ensures those connected to your business don’t panic before the transition takes place.

  3. Consider your curb appeal

    Just like if you were preparing your home for sale, it pays to spend some time sprucing up the outward appearance of your company before selling. Prospective buyers will likely want to visit in the lead-up to making an offer or when conducting due diligence, so it’s important any necessary repairs, improvements and tidying is completed to present your business in the best possible light.

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How to value a company

This section is devoted to the crucial first step to take before selling your company – how to determine the value of a business.

How is it possible to sell a business if you don’t know how much it’s worth? That is one of the first lightbulb moments you should have while preparing your exit strategy.

You should have a good estimate of your company’s value before you even decide the time is right to go to market – if not, you’ll be left hoping that your current valuation is in line with what you need for the next stage of your journey.

How much is my business worth?

In truth, the answer to this question is fairly straightforward:

The value of any business is what a willing and informed buyer will pay for it!

Of course, the process of determining a company’s value is a bit more complex. It depends on the strength of the buyer’s market right now, the appeal of your industry, its recent and historical financials, the value of its intangibles and more.

Ultimately, all of these factors will result in different values from buyer to buyer. Buyer A might see a lot of value in your diverse customer base, while Buyer B doesn’t care too much about that, and instead sees the value in the experience and expertise of your employees.

For this reason, it’s crucial that before even considering putting your business up for sale, you reach out for a professional business evaluation. While you may feel you have a good grasp on your company’s value, this removes any doubt that you haven’t overvalued or undervalued your business.

Learn more about our Business Valuation services

How to estimate the value of a company

A business evaluation is a useful tool because it allows the business owner to look at his/her company with a completely objective viewpoint and understand how a buyer might view the organization.

There are several methods that valuation firms, M&A professionals and buyers use to estimate the value of a company before selling, all with various benefits and drawbacks. However, one of the most widely used is the Discounted Cash Flow method (DCF).

How to estimate the value of a company

Put simply, the DCF uses your company’s projected EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), multiplies this based on market analysis and discounts this based on various risks that are unique to each individual company.

Okay, let’s break this down further: EBITDA is the common metric to demonstrate a company’s operating profitability, as it removes the impacts of non-operating decisions made by the existing management, such as interest expenses, tax expenses and more.

EBITDA is a value that most buyers, investors and analysts will look to find when deciding which selling business is preferable, as it is a strong indicator of its growth potential. This value is determined alongside your company’s other financials over a span of time (ideally 3-5 years) to reassure buyers that this value is consistent and reliable.

EBITDA formula

Once this is determined, financial professionals can multiply this by a value determined by current market conditions and economic factors, that give a good estimate of the value of your company at present.

Then, by analyzing your company’s unique strengths, weaknesses, opportunities and threats (SWOTs), this value is then discounted based on these to leave a final, well-considered Business Enterprise Value (BEV).

Our valuation team examines dozens of key metrics on each company to discern the level of risk/lack of risk associated with each. Using the Discounted Cash Flow method allows the valuation firm to adjust the rate to factor in the uniqueness of each client, rather than simply end with a generalized assumption based on your company’s industry and financials.

Estimating the value of your business will also require valuations to be assigned to your intangible assets. These are items that won’t appear on your balance sheet, but still have a value in that they set your company apart from your competition. Examples of intangible assets include:

  • Patents, Trademarks, or Copyrights – Depending on the industry you are in, these items can have tremendous value to certain synergistic buyers.
  • Key Customers – Often a buyer will pay a significant premium over a financial value simply to gain access to a solid, stable customer base.
  • Employees –If you have employees with long tenure, recognized experience, and solid credentials, some buyers will be willing to pay a premium for this talent.
  • Software —If your software provides efficiencies and benefits that the business wouldn’t have without the software, it is a separate asset.
  • Goodwill — Goodwill means many things to many people, but generally it refers to intangibles like reputation, brand name, and location that lead to repeat business.

Identifying and noting these intangible assets are crucial when selling a business, as these could be significant factors that separate the value and potential of your company over competitors when buyers weigh up their options.

How to increase the value of your business

After your company has received a comprehensive business evaluation, you might discover that its estimated value does not match your expectations, or the amount you require to make the next step in your life. In this scenario, before selling the business, it is recommended you apply value enhancement strategies to maximize the potential of your exit.

How to increase the value of your business

Naturally, not all business owners appreciate the idea that the business they have poured sweat equity into for years may not be attractive to buyers in its present condition. But the reality is that you can possibly improve your value and sometimes even your deal structure by applying some fundamental strategies.

An immediate way to do this as part of valuing a company is recasting. Most business owners employ legal tactics to suppress profits during their ownership in order to minimize the amount of income tax they pay. While this is a viable approach while running the company, this becomes an issue when selling a business, as it reduces its EBITDA value.

Therefore recasting, a perfectly allowed Generally Accepted Accounting Principle (GAAP), removes the expenses not required on the ongoing operation of the company. This includes features like owner salaries, travel costs, one-off repairs, excessive rents and more.

By ousting these from the equation, you are left with a clearer indication of your company’s profitability and almost certainly a stronger valuation than before your financials were recast.

Alongside recasting, there are several other techniques that can be employed with the aim of increasing a company’s value before it’s sold. Our team employs a Roadmap for Enhancing Value (REV) to map these areas that can be improved and hidden value can be unlocked, so this can be refined and improved over time.

Overall, these refinements will relate to resolving any ‘risks’ associated with your business. Buyers loathe risk in all its forms, and when selling your business it will be beneficial to eliminate as many of these as possible. This will encourage them that your company will be profitable for them and not leave them with excess baggage.

Here are some risks for buyers that should be addressed before selling a company:

  • Owner dependence

    Buyers acquire your business for the future, so will be concerned if the success of your company is deeply tied to your leadership. To overcome this, it’s encouraged to build a strong management team around you.

  • Customer concentration

    Companies that rely on just one or two major customers raise big red flags for buyers, as if one of these is lost either during or after the transaction, its revenue will likely take a significant hit.

  • Lack of recurring revenue

    If revenue is constantly fluctuating, buyers will be concerned about a business’s ability to generate consistent profits.

  • Financial reporting

    Buyers will be troubled if you display any hesitation over your business finances, which is why they expect in-depth, historical records of your financials as part of their due diligence process.

  • Industry norms

    if your expense ratios don’t line up with averages in your industry, buyers will be hesitant to choose your business over one that does reflect it.

This is just a short sample list of typical value enhancements that can be implemented prior to taking your company to market that can make it appreciably more “buyer ready.”

By applying this information on how to determine company value and enhancing it by reducing the risks associated with it, you take a confident first step to selling your business for an optimal value.

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How do you find someone to buy your business?

Once you’re happy with the estimated value of your business and have successfully enhanced this, your next aim in how to sell a business is sourcing the ideal buyer.

Far too often, business owners make assumptions about who will acquire their company when their journey comes to a close. These beliefs tend to involve their children, key employees or their competitors.

How do you find someone to buy your business?

However, if you aim to maximize the value of your business when you sell, you need to broaden your horizons over who could purchase it. Your ideal buyer could very well be your competitor, or it could be a private equity firm seeking to purchase, grow and re-sell your business years later for an increased return on investment?

Or a firm aiming to incorporate your company’s unique skills and expertise to bolster the growth of a platform company already on their books, so both of your companies evolve and develop together?

Or maybe it will be a professional buyer representing a firm in a completely different industry to yours, but has ambitions to diversify their services and shares a similar culture to your company?

Especially during an active seller’s market, the breadth of buyers in a range of industries looking for viable acquisition targets offers you wider opportunities when selling a business to source a buyer that will offer a fair price and will continue to nurture the company you’ve developed.

How do you market to buyers when selling a business?

As mentioned in the section on documentation, your hook into prospective buyers comes in the form of your Confidential Business Profile (CBP). Essentially a top-line summary of your Offering Memorandum, your CBP will present the most important and standout facets of your business, with the aim of convincing prospective buyers of the opportunity you’re presenting.

This is where the advantage of working with a well-connected M&A advisory firm pays dividends. They will likely have links to a wide network of buyers and investors that they can discreetly send your CBP to, and will have a firmer grasp of the buyers that might have an interest, ensuring no time, money or effort is wasted pursuing inadequate purchasers.

Following this marketing, your M&A advisors will create a limited auction to further narrow the shortlist of interested parties. A limited auction, also known as a targeted or controlled auction, creates a competitive bidding environment that pinpoints the most interested buyers and invariably increase the value and attractiveness of your company.

A limited auction offers the best of both worlds between a broad auction and target solicitation with regards to time, confidentiality and cost. As your business is presented to a reasonably small but highly interested group of buyers, you minimize the risk of confidentiality, and improve your odds of identifying the right buyer in the shortest time.

A successful limited auction requires a full understanding of the seller’s goals and experience in maintaining control during the process. That’s why it’s imperative to work with a skilled M&A advisory firm at this stage of selling a company, to ensure the process of sourcing a buyer is professional and efficient.

How do you choose the right buyer to sell your business to?

Determining the right buyer for your business involves several factors – it’s not all about the price. Ideally, the buyer you select should fulfill the following three elements:

  • Their offer meets (or exceeds) your personal financial needs
  • They will protect and grow the legacy you’ve left behind
  • They will match the culture you’ve established and support the team you have created

If you can tick off all three of these criteria, you’ve been incredibly successful when selling your business.

We’ve always found it interesting with clients that, in many situations, the final value offered was not the ultimate decision driver to agreeing the sale of the business. It’s important to remember that private companies are made up of humans that, no matter how logical they may be, have feelings that transcend their lives outside of work and ultimately become part of the selling equation.

In order to determine if the person buying your business is right for you, it’s important to get to know them. Interview them. Explore why they have developed their own business and what they see in yours.

To help you decide on the right buyer for your requirements, here’s a sample of some key questions to ask a prospective buyer:

  1. How did you get started in your current business?
  2. What do you find rewarding in your role?
  3. Have you made any acquisitions in the past?
  4. What are your long-term goals for your business?
  5. Who are the key players on your team and what are their strengths?
  6. Why are you interested in my company?
  7. What would be your strategy to grow my company post-acquisition?
  8. Will you be keeping my employees on board after the sale?
  9. Are you planning on keeping our company name?
  10. What do you see as my role and level of involvement in the business going forward?
  11. How do you plan on structuring a deal?
  12. The ongoing legacy of my family business is important to me. How will you ensure that it continues post acquisition?

These questions don’t just help you determine whether the buyer will not only present an offer that reflects your company’s value and supports your needs for life after business. They also reassure you that the business you’ve built up will be treated in a manner that matches your hopes once you’ve departed.

So spend some quality time with prospective buyers. It will soothe any concerns about the legacy of your company and come to terms with passing it to a new pair of hands.

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What do I do once I sell my business?

Selling your business is the start of your next journey, but where will that take you? When exiting your company, it’s not just vital to consider the process, but the destination.

The simple answer to the question “What do I do once I sell my business?” is whatever you want. Now’s the time to pull out your bucket list, draw up a list of holiday destinations, and generally go out and enjoy your freedom.

Unfortunately, like with most life-changing scenarios, the real answer isn’t this straightforward. The analysis of the direction you want to head after selling your company is one of the most important processes you’ll ever go through.

Whether you’ve only started contemplating your exit or are much further down the process, we highly recommend you take stock of your desires and motivations for post-transaction, and create a plan for life after your business.

Can I sell my business?

Most business owners have been so busy operating their companies for the last several decades that they have neglected themselves, and many have no hobbies or outside interests, save their families, to keep them busy post acquisition.

This can make it challenging for you to even consider selling a business – What will I do with the spare time? How will I function without a reason to get active in the morning? Can I bring myself to sell my business?

Here are some ideas we’ve taken from working with business owners to help you come to terms with the next step of your journey:

  • Take inventory of what you like to do – think about all the things you would like to have done over the years but couldn’t because the business occupied your time.
  • Have frank and honest discussions with your spouse and loved ones about what they believe you should do post-sale – their input into your future could be enlightening and give you a clear vision of what to do next.
  • Start exploring and rediscovering pastimes and opportunities in your spare time – although you probably don’t have much spare time on your hands, try and use some of it to discover new passions that you could devote more time to post-sale.

However, one thing that’s important to remember is that your motivations for selling your business will likely change throughout the process. This is natural, and will likely develop as you become more familiar with M&A, the exit process and talking to buyers. So, even if your motivations aren’t fully formed for life after business, don’t let it bring your exit planning to a halt.

What you choose to do after selling your company is completely up to you. Many of our past clients appreciate more time with the family, while others fulfil lifelong ambitions to travel the world or learn new skills. Some even come back to us years later looking to acquire businesses as they miss the demands of running their company.

Regardless of your personal goals, knowing why you want to sell your business is just as crucial as knowing what you can sell your business for, or how to exit for maximum value. It will crystallize the objective of the hours spent running your company, and provide an immense feeling of success when you gain the capital to live out these ambitions one day.

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Summary

We hope this comprehensive examination of how to sell a business has given you a greater appreciation of the many thoughts, feelings and steps involved.

For any business owner, exiting their company is a life-changing experience. With the right knowledge, guidance and support behind you, it can turn a potentially complex, difficult and sensitive journey into a more manageable, logical process.

Above all else, we hope this demonstrates that selling a business is not an EVENT, it’s a PROCESS. It’s a journey that takes months (if not years) to fully prepare for. Now you have a clearer idea of what will be involved when exiting your company, you are in a better position to prepare for this inevitability and achieve a sale for an optimal value.

Discover how to sell a business for maximum value

Of course, there is only so much you can learn from a guide of how to sell a business. If you’d like to learn from M&A professionals that are hands-on with the process on a daily basis, join us at our complimentary executive conference.

Held throughout North America, these are led by specialists who have extensive experience following the steps to selling a business, resulting in numerous successful transactions. Our featured speakers will provide focused guidance on how and when to sell a company for the maximum value, so you understand every aspect of the journey.

It costs nothing to attend beyond a few hours of your time. Those few hours could make all the difference to your exit planning. It’s never too early to start learning – whether you’re contemplating an exit or still reveling on your current path, this knowledge will ensure you’re prepared to sell when the time is right. 

Alternatively, if you are clear in your mind that you’d like to exit your company, you can contact our dedicated team for more information about selling a business or more general M&A advice. Call us on 972-232-1121 or send us a message to learn more.

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We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”
Karen S. Williams, CFO, BW Manufacturing
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.
Karen S. Williams, CFO, BW Manufacturing
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.
Michael J Polarek, President, Paragon Packaging
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!
Andy Graham, Vice President, Modern Heating & Plumbing
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.
Michael J Polarek, President, Paragon Packaging
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software