8 Things To Consider When Selling Your Business

By YEC

For many entrepreneurs, the prospect of a buyout offer can be tempting. However, amid the whirlwind of excitement and potential financial gain, it’s important not to lose sight of critical factors that can significantly impact the deal. Here, Young Entrepreneur Council members share what they consider the most critical factors to consider before selling your business.

While it’s easy to get lost in the excitement, what’s one key factor you must consider when another company offers to buy your business, and why?

1. Potential bad actors

Competitors often express an interest in purchasing a business merely to gain as much information about that business as possible with no intent of actually completing the purchase. Be sure to have a solid mutual non-disclosure agreement in place before you share any of your confidential information, and trust your gut before you share too much of your company’s secret sauce. —Doug Bend, Bend Law Group, PC

2. Your company’s price

The key factor to consider is what price you’re willing to sell your company for. Being clear on your price target will help you quickly determine whether you should proceed with going through the expensive and time-consuming process of completing an M&A transaction. —Nanxi Liu, Blaze.tech

3. Implications on your lifestyle

Is your business a “lifestyle” business, built to scale or built to sell? I started with a lifestyle business because I truly love the professional services we offer. After a decade, my focus was on scaling and offering our services to a wider audience. If somebody asked me about buying, I would ask myself what I would do with my time because my work and helping people define a large part of my life. —Givelle Lamano, Oakland DUI Attorneys

4. Your involvement after the sale

Think about how much you want to stay involved after the deal. It’s important because your level of involvement can affect the future direction of the business. You need to decide if you want to continue leading the company, have a transitional role, or step away completely. It’s all about finding the right balance between letting go and staying connected. —Abhijeet Kaldate, Astra WordPress Theme

5. Your company’s value over time

The most important factor to consider when another company offers to buy your business is an assessment of where your company will be in the next five or 10 years. This will make it easier for you to decide whether or not you should sell your business. The offer given to you may be lucrative, but you’ll know the actual worth of your business after you’ve carefully estimated its true value. —Stephanie Wells, Formidable Forms

More articles from AllBusiness.com:

6. Maintaining customer relationships

One factor that you must consider when another company offers to buy your business is how to continue maintaining customer relationships. You must have invested your time, effort, and money to build a strong customer base, and they might start feeling disconnected if a new company takes over your business. Make sure to talk it out before merging your company with another. —Thomas Griffin, OptinMonster

7. The deal’s fine print

Don’t forget to read the fine print during the due diligence process. Most deals come with spicy clauses that will impact you personally or your team—like by keeping you aboard for years after the exit or slashing your existing team in half. Openly discuss future goals and commitments on both ends. Don’t be surprised if the new direction collides with your vision. —Mario Peshev, Rush

8. The terms of the deal

Make sure you’re okay with the terms of this deal and that you are ready to meet the requirements of your buyer. Sometimes, agreeing to sell the business is the first step in a long process, which may include growing your business to a certain ROI and meeting very particular milestones before you can sell. You need to be confident in your ability to achieve it within a certain time frame. —Samuel Thimothy, OneIMS

About the Author

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most successful young entrepreneurs.

RELATED: Should You Sell Your Business? Ask Yourself These 5 Questions First

Source link

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

21,935FansLike
3,912FollowersFollow
0SubscribersSubscribe

Latest Articles