Do you know your businesses value? Are you desperate to get out? The biggest factor when it comes to selling your company is…YOU. It’s your decision on who you decide to sell to and how the deal is ultimately done.
In 2018, a mild 10 years after the recession, it’s still not an easy place to sell and according to Michelle Seiler-Tucker, a business broker and founder of Capital Business Solutions, 60% of company owners who are trying to sell, just can’t solidify the deal. Your business, your baby, your livelihood; something you’ve put absolutely everything into and for that reason alone you need to not just sell your business for its value, but for the value of the years of effort put into it.
The almighty time
Firstly, you need to make sure you are selling at the right time. You want to sell when your perceived value is at an all-time high. Did you just score your biggest contract to date or gain some helpful attention from the media, if so, you might want to consider selling now? Bryan Johnston notes that doing this might sound ‘counterintuitive, but it works. That big account or positive coverage adds to its value. Sell at the right time, not when things are looking bleak.’
What makes your business valuable?
What makes your business more attractive than John’s down the street? Whether it’s your loyal customer base, strong management team or steady flow in income sources, you need to make this apparent to buyers. A savvy buyer knows what to look for and if your revenue streams are down and you don’t have people buying, it’s a big red flag.
Branding. Branding. Branding
According to Seiler-Tucker, 95% of owners don’t understand how to correctly brand their own company. The five levels of branding are essential to those who want to sell:
- Brand absence: consumers aren’t familiar with your company or what you offer
- Brand awareness: consumers are now familiar with your company
- Brand preference: consumers prefer your company to others
- Brand insistence: your customers are loyal to you and they would prefer to not use competitors’ products
- Brand Advocacy: consumers will recommend your product to others
Seiler-tucker goes on to say, ‘when you can get to that level where people are referring you instead of you selling yourself, money will come to you in droves.’ A combination of good market and ultra-positive experiences for your consumers will get to that place.
Who knows your business better than you? The answer is no one. As the person who started the company, your understanding of the structure and provisions would be better than anyone. Have a sturdy plan that can show your potential buyer how you see the company growing and expanding over the coming years.
Your businesses value is about so much more than just a figure, but you do need to know what potential buyers in your sector are looking for. You aren’t looking to cheat someone or dupe someone into buying your company; instead you are highlighting all areas of the company, so the potential buyer can see the whole scope.