In the process of selling a company, it is very important to understand the real reasons why you want to sell your business, but also how to make the transfer, so that you get the desired results.
The result of the sale is directly influenced by yours and your broker`s ability to make the transfer by taking into account a few simple rules and approaching a transparent attitude towards the reasons why you decided to sell the business.
How to sell my business? Follow these organized steps:
BUSINESS ANALYSIS, PREPARATION. . . SETTING OBJECTIVES
Diagnosis (legal, commercial, technical, human resources, financial)
Realistic Business Plan
Evaluation / Price Expectations
- Implementation of strategy & materials
Sale of shares vs. transfer of business
Strategic Investors vs. Financial Investors
Total / partial success
The working team
Estimated working schedule
Marketing the proposal to the prospects in the list and through specialized platforms
Meetings, visits, trips
- Contract negotiation. Completion
Negotiations: Price, Terms & Conditions, Representations & Warranties
Transfer price-shares / shares
Beware of mistakes often made by business owners in the process of selling the business, as well as their consequences!
- Giving too little importance to business preparation
- Building price expectations on a strictly subjective basis, without taking into account the market situation, similar transactions etc.
- Starting the process of selling the business without the consent of partners and / or families (if applicable)
- During the negotiations, becoming emotionally involved, beyond the control
- Being inflexible
- Imagining that by hiding certain aspects of the business, they will not be discovered by anyone until the end
- Being too optimistic when providing information and estimates about the future potential of the business (the business includes false data and information), believing that the investor will pay the money without checking;
- Granting unjustifiably, during due diligence, full access to many of the extremely confidential information related to customers, employees etc.
- Confusion is made between the business and the company’s assets or the value of the assets is overestimated in the transaction price
- The importance of internal confidentiality is underestimated, and the information that the business is sold reaches the market and / or employees, with disastrous effects for the sale;
- Most business owners call their business “my child”, and assume that the investor has the same feelings about the “child”, but this is not true.
- The transaction may fail even in spite of the desire to sell or the fairness of the price and conditions that are being offered
- The investor may withdraw their intention to buy after due diligence, but is left with a lot of information that they can use in their interest
- You can jeopardize the “life” of the business, if, when you have to choose between selling at a lower price and not selling at all, you choose the latter option – given that the sale was perhaps the only valid option
- Employees, competitors, banks, suppliers find out that you want to sell and exploit the information in their own interest
- Employees get scared and leave the company, together with customers
- Negotiations may fail in a disastrous way and, from a potential partner, you get yourself with a fierce rival.