One of the great things about starting your own company is that you may be able to sell it in the future for a massive profit. Depending on how much you sell it for, you may never have to work again to secure your financial future. This could allow you to spend more time with your family or invest in other businesses that you believe in. However, if you are going to sell your business, you need to do it properly.
When to Sell Your Business
The most important part of selling your business is knowing when to get out. You may decide that you are going to wait until the company is worth a certain amount of money, when you feel like the industry has peaked or when you simply don’t feel up to the task of running the business anymore. Regardless of when you sell your company, make sure that you have a succession plan in place.
Your succession plan will determine who is going to take over for you after you sell assuming that you sell to your other partners. If you decide to sell to an outside entity, that entity or shareholders of that entity may decide who takes over for you. Having such a plan allows for a smooth transition of power and assures employees and customers that the company they know and love is still going to be around to deliver a quality product or service.
How to Sell Your Business
How do you sell your business? Ultimately, the answer to that question is up to you. You may determine that the best idea is to sell your business yourself to save on fees and other costs that a broker may charge to complete the deal. However, if you run a public company or have multiple shareholders, then it may be necessary to hire a third-party adviser to ensure that shareholders get maximum value. Legal considerations need to be taken into account. You also don’t want to burn bridges because your reputation is valuable and the business world is only becoming a smaller place in the digital age.
A deal will also be more complex if there are disagreements about valuation or if the purchase needs to be structured in a tax-friendly manner. For instance, a buyer may not agree to take on all of the company’s debts or may want a discount on the company’s share price to complete the purchase. If the organisation operates in multiple countries, tax laws in more than one country may need to be taken into account before a deal can be completed.
Whoever’s buying your business is going to want to know the business is actually making money, so make sure you understand your financial position and update your financial statements before putting it on the market.
Where to Sell Your Business
Where you sell your own business is also up to you. If you own an Internet property, you may decide that it is best to sell it on an auction site that specialises in buying and selling domains. You may also decide to sell your site to an established company that will use the domain to further its own brand.
Just like selling anything else, you could put a notice in the paper or an online classified site that your company is up for sale. Ideally, you would put a notice in a publication that caters to business owners or is otherwise well read by those in your industry. If you don’t know of any publications where you could sell your company or have any contacts who may know of an interested buyer, this may be another case where you want to hire a third-party to facilitate the deal.
If you run a public company, you may decide to simply alert the media that the company may be for sale soon. This should generate enough interest in your company to get a suitable offer. Assuming that you run a publicly traded business, an interested party may decide to take your company over by buying a majority stake. Such a takeover would be considered hostile if you didn’t want it and friendly if you were interested in the deal.
Selling your organisation for a profit could be the best decision that you ever make for yourself and your family. In fact, some people start companies with the sole intention of selling them once the valuation increases to a suitable level. Although it may take months or years of effort to build a brand and then find a buyer for it, it could be worth it if the price is right.
🔴 Interested in consulting?