What Does Selling A Business Involve? Part 1

August 26, 2011 by  Filed under: Management 

A business owner may only ever be involved in one business sale, typically when they are looking to retire. Other owners may find themselves having businesses for sale at several points in their careers as they move from one project to the next. This pair of articles looks at what is involved in realising the value of a business.

Because whatever the reason for sale, both types of people have one thing in common, they both need to get the best deal possible out of the sale: if retiring, so as to secure the future; if looking to move on, to fund the next venture.

This series of articles are written to help you to ensure you get the best possible deal when you come to sell, for whatever reason.

What Do You Need To Do To Get The Best Deal?

To get the best result from any sale requires preparation, having a structured approach to marketing what you have for sale, and negotiating the actual deal. Take for example selling a car. To get the best price you would generally need to:

1 Decide why you want to sell – you need to have a convincing reason to tell prospective purchasers, such as trading up, otherwise they may think that it’s a problem with the car that has led you to sell.

2 Pick the best time to sell – so that you are selling at a time that suits you (rather than being forced into a sale when you are desperate for the money), and you are selling at the best time of year (eg you are likely to get more for your convertible in May than in November).

3 Do some market research – to check how much your car is likely to be worth, what you want to get for it, how much you will ask (to give yourself some room for negotiation) and what seems to be the best way to advertise it.

4 Get the car and the supporting paperwork prepared – so that the car is attractive, you have taken out anything you want to keep (or could sell for more separately), you have the HP paid off, you have the service record, MOTs, receipts and logbook to hand.

5 Start your marketing – place your adverts and be available to take any calls.

6 Deal with enquiries – meet prospective buyers, give out the right image about yourself as much as about the car and deal with their questions.

7 Let the buyer do his checks – look under the bonnet and take a test drive.

8 Negotiate the price – (how much) and the terms (cash or banker’s draft, not personal cheque).

9 Complete the sale – take cash and write out a pair of signed receipts (one for you to keep) describing the sale on an as seen basis to avoid any future claims; and send your part of the logbook in to the DVLC so that you don’t start to receive demands for payment of the buyer’s parking tickets or speeding fines!

The same general approach will apply to selling your business. Just bear in mind that when your buyer decides that he wants an independent inspection of what he is buying, it’s likely to be an ACA or ACCA (a Chartered or Certified Accountant) that turns up to look at the books (a ‘due diligence’ report), not the AA to look at the engine and this is what we will look at in the next article.

Mark Blayney wrote How to Sell Your Business For The Price You Want. For more information on the value of a businesses, or a free copy of his 21 Golden Rules e-book contact him at: http://www.growgroomgo.co.uk

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