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3 steps you should take before you try to sell your business

On Behalf of | Jan 4, 2023 | business formation & planning

Perhaps you have reached an age where you are ready to retire, or maybe you have run your company for several years and now want to pursue opportunities in a different industry. There are countless reasons why people may choose to sell the business that they have built or inherited.

Selling a business means letting go of control over its future direction and letting someone else profit from its future success. Before you list your company for sale, there are a few steps that you need to take for your protection and to help maximize the return on the sale process.

  1. Communicate with your top talent

Nothing will undermine the success of a business sale or merger more quickly than brain drain at your company. It is common for a portion of workers to leave the company when a business transition, like a sale to a new owner, takes place. Workers concerned about the future of the business or the stability of their positions may look for opportunities elsewhere and exit the company shortly after you announce or complete the sale.

Addressing the transition before it occurs by negotiating new contracts with your top talent to ensure there will be adequate transition support for the new owners can help ensure that the company remains operational and can even increase the value of your business in the eyes of some would-be buyers.

  1. Perform a thorough business valuation

From the depreciation of your machinery to the surge in real estate prices in the community where you operate, there are many factors that can influence what your business is worth on the open market. A thorough business evaluation is crucial if you want to secure the maximum returns possible when selling the organization to new ownership.

  1. Plan for your own transition support

In many cases, you are the person with the most insight into the company’s daily operations and the most control over how clients and your staff perceive business changes. Committing to staying on for anywhere from three months to a full year after the sale could help ensure the company survives the changeover. You may need to adjust your personal or career plans to reflect that extra time at the company.

Planning carefully to address potential issues and maximize the company’s perceived worth will help facilitate a smoother sale process when you want to sell your business.