Starting a new business can be an incredibly rewarding process to go through. At a certain point, you may decide that it’s time to sell that business, to cash in your chips and move on to the next project. There are several important steps that you’ll need to go through if you’re looking to sell your start-up – here they are.
Preparing the business
If you want to maximise your returns while minimising any potential issues, you’ll want to prepare the business for sale. To do this, you’ll want to make sure that you get all of the relevant documentation in order, from contracts to tax records.
Additionally, you will likely want to compile your plan for the coming years, along with growth predictions, so that the potential buyer will have some kind of idea as to what they can expect from the sale.
Valuation
An important step when it comes to selling a business is valuation. It’s important that you get this right – too high and you might deter potential buyers, too low and you may end up losing out. It can be difficult to assess the true value of your own business, meaning you may need to seek an external opinion. They will be able to make growth predictions, look at your assets and debts, and then make a valuation, potentially based on revenue over a projected time period.
Use a broker
Many people who sell their business choose to use the assistance of a professional business broker such as Dexterity Partners. They’ll be able to leverage as many appropriate marketing channels as possible, exposing the sale to the right kinds of buyers in a discreet manner. Additionally, they’ll be able to put you in contact with the relevant experts necessary for the sale, from lawyers to accountants.
Negotiation
Once your business has been prepared and put on the market, you’ll need to negotiate with potential buyers. Depending on the service they provide, your broker may be able to help here. Based on the valuation and anything that the buyer has concerns about, you should be able to come to a value that you’re both happy with.
From there, you may choose to take things to the next stage, such as allowing the potential buyer to conduct due diligence. During this stage, they will carefully inspect every area of the business, to ensure that it’s in a condition that they’re happy with.
Ensure confidentiality at all times
It’s important that you maintain confidentiality throughout the process, in order to protect both the value of your business and any sensitive client information. While buyers will need extensive access to the business, in order to conduct their due diligence, it’s still important that legal protections are put in place. A qualified solicitor will be able to inform you further on how best to go about ensuring confidentiality, based on your specific scenario.
If the buyer doesn’t find anything that worries them during due diligence, and you’re both happy with the price, then you can complete the sale. Obviously, there may be many more steps in addition to those listed above, depending on the industry you’re in. It’s always worth seeking professional assistance with the sale, from brokers and lawyers, to ensure that you go about things in a legally compliant manner.
