No matter the reason, from retirement to a change in lifestyle, selling a business is a huge and life-altering decision. Therefore, it’s no surprise that when looking to sell their business, some fears and assumptions come to the surface.
Our brokers here at Business Partnership know what makes a successful business sale and we want to share some of the worries associated with selling and the common fears that put barriers in the way of a successful sale.
Not achieving the right market value is the top common fear for many people selling their business as they have no idea how to value their business. The first thing they ask is for a free valuation as they’re concerned that they could turn down a great offer in the hope the next offer might be better. What they actually need from a business broker is a marketing strategy to achieve that best offer.
Confidentiality is also a common fear for sellers as they don’t want their customers, suppliers or staff to find out about a sale before the deal has been agreed. A sale is often a positive decision, but people jump to conclusions and adopt a worst case view and assume there’s something negative going on. Depending on the nature of the business, some people are also conscious not to upset the supply chain, by selling to a competitor, or to create uncertainty amongst employees.
The top common fears:
- Not achieving the right market value
- When do I get paid?
- What happens to my legacy and/or employees?
- Not being able to sell?
Knowing when you get paid is another key concern for many. A seller wants their payment upfront and to know how much they will get paid when they hand the keys over to the new owner.
There are some sellers who are also worried that the deferred payments doesn’t appear – especially where they are relying on it for their retirement and it is vital to the life they had worked so hard to achieve. In this instance our advice would be to prepare your business properly for sale, remove the risks and then go and find buyers who can afford your business.
For many people, they are concerned about what will happen to their legacy and employees once they sell, especially if some staff have been working for the business for many years – there can be strong emotional bonds with their colleagues and the business. Some sellers are willing to accept a lower offer to ensure their workforce are safe and their brand name continues long beyond the sale.
Last but not least, some sellers worry that they won’t actually be able to sell their business and question whether they have created something of value. Again, good preparation in running your business as well as in the sale process will make it a desirable asset that others want to own.
Our research confirms that within a year of having sold, 75% of business owners feel one significant regret after their sale, because they hadn’t thought it through. They hadn’t thought how much cash was enough to support the lifestyle they want, how their employees would be looked after, or what they want to do next to fill the gap left by owning a business. We help work through those issues to ensure these fears don’t get in the way of a successful sale.
A skilled business broker will help with all of these issues – from preparing you and the business for sale to developing the right marketing strategy, protecting confidentiality, finding the best buyer and agreeing a deal structure that protects both seller and buyer.
When looking to sell a business, knowing your business value and having the right guidance throughout the entire process is key. Find your local broker to make the initial call.