Tuesday, 22 November 2011

Is Your Decision to Sell Firm?

One of the biggest mistakes business owners can make is the lack of a ‘Firm Decision to Sell’.  My advice… If you have not deliberated and come to the firm decision that you are going to sell, don’t start the selling process. 

Preparing to sell your business means more than simply straightening up the files and getting up-to-date with your bank statements.  In order to get the best price there a number of steps the Seller needs to take.  Often those steps may seem time consuming; however, done properly they can lead to improving their management practices and ultimately improve the desirability and value of their business. 

Plus, once a Seller and Buyer come to an agreement, often times the preparation to help sell the business can help the deal close quicker.

The #1 question buyers will ask is ‘Why are you selling’.  Sellers must always know their reason for selling and it must be firm in their minds.    Most sellers are motivated by reasons other than money.  For example, a pending retirement, a critical illness to themselves or family, pressure from a retired spouse, and burn-out are just a few popular reasons. 

Money and the right price are important, but if the Seller is not mentally prepared to sell, don’t.  

Selling a business can be a complex legal, financial, and emotional process.  Most know a successful business sale needs a motivated Buyer, but equally important it needs a motivated Seller.  A motivated Seller is someone who has a definitive objective in mind, someone who understands what’s involved in the process and someone who has a desire to reach the finish line. 

Don’t make the mistake to think this means a Seller will need to sacrifice on their business value.  It is a necessary ingredient to a successful transfer.

A business broker is a professional that Sellers should turn to for assistance when deciding to sell or as they deliberate over the prospect of selling.  This will give the Seller an opportunity to learn about the process, how Buyers are likely to view their business and prepare them to maximize their value.  

Also, not only does having a third party represent their interests indicate that they are taking this venture seriously; it can often lead to a number of buyers being interested in their business.

Do you have small business questions you would like answered about this article or others?  Please visit www.VRWindsor.com or call 519-903-7807. 
William Sivell is a sales representative of VR Windsor Inc., Business Brokerage; his blog appears every Tuesday.

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