We’re intrigued by Tensie Homan’s article, “When Selecting a Buyer for Your Business, Don’t Just Consider Price” in Entrepreneur Magazine. She offers some great insights into considerations when selling a business. Critical to your long term happiness is considering more than just the transaction. Looking at a sale in a vaccum is a surefire path to problems later on.
Ms. Homan lays out 4 key considerations for maximizing your return (both personal and financial):
- Have a plan for what comes next
- Create realistic value expectations
- Make the due diligence process easy for a buyer
- Go in with eyes open
These are all great points, and I think they all can be boiled down to “have a plan.” Great advice for most things in life.
Not to be picky, but let’s put a finer point on this: selling a business is a process, not a single event. Approaching your sale like a singular event sets you up for losing value in the actual sale, and potentially foregoing some happiness in the golden years. So let’s revamp Ms. Homan’s points:
Have a Plan for What Comes First.
Go into the sale knowing 1) what your business is worth, and 2) how much you need to live comfortably post-closing (whether you are retiring to catch fish and play golf, or looking to fund your next startup, this advice still holds).
Have a Team to Facilitate the Sale Process.
Entrepreneurs can do it all. You can learn how to sell a business. Don’t be tempted. Draft the right team: broker / intermediary, attorney / CPA. Rely on THESE folks to find the right buyer, make diligence easy, and protect your interests while getting to a closing.
Selling a business should be the culmination of your life’s work. By treating a sale as a process rather than an event, and being proactive throughout, you’re much more likely to experiences a successful exit on your preferred terms.