A new year often brings change. If you’re a business owner, 2019 might mean selling your business. If you want to sell your business in 2019, there are things that you should do in order to protect your interests and go about it in the best possible way. Doing the right things can help you get top dollar for your business and make the sale as smooth as possible. Here are 10 things that you should know about preparing to sell your business in 2019:
1. Prepare the paperwork for your business sale
Smart buyers want to see the paperwork for your business. They rely on the paperwork when they first make the decision to explore buying the business. They also rely on your documents when they make the final decision to close the sale.
One of the first things that you should do when you decide to sell your business in 2019 is put your business paperwork in order. The sooner you get started, the more time you have to address any questions that might arise. Having your paperwork prepared and orderly is the first step to finding enthusiastic buyers and getting a great sale price.
This generally includes several years of statements for all your bank accounts, credit cards, copies of customer contracts, and more.
2. Learn how to value your business for the sale
To get a fair price, you need to know what your business is worth. Different types of businesses use different valuation methods. You need to learn about the various business valuation methods like profit, assets and cashflow. The more that you know about how to value your business, the better you can justify your asking price.
Also, research the different types of business sale (asset vs stock), know the differences and how they affect your valuation.
3. Perfect your sales pitch
You need to be prepared to market your business. It’s important to think through how you’re going to communicate to potential buyers that your business is a great investment. Even if your business is sound and a great opportunity, you still need to convince buyers that they should jump in with both feet. Use the start of 2019 to think through how you’re going to market your business to potential buyers and convince them to buy your company.
4. Pick your team
At least some of your employees are going to know about the possible sale of the business. You’re going to rely on them to help you prepare documents at the least. Think through who you want to know about the sale of the business and why.
Think through who’s best suited to help you work on selling the business. Remember that your employees may have strong opinions about you selling the business, and they may have lots of reasons to want a particular outcome. Decide who’s best to help you prepare documents and work towards your goals.
5. Prepare employees for your business sale
There are some important considerations for employees when you sell your business. The buyer may want them to have non-compete and non-disclosure agreements so that they can’t jump ship as soon as you sell. Your attorney can help you prepare the agreements that you need to make sure that your team can continue to help your business now and into the future.
6. Think through answers to tough questions
Your potential buyers are going to ask you difficult questions. Now is your chance to think through your answers. Preparing to sell your business in 2019 means thinking through how you’ll address unflattering points and weaknesses in your business.
7. Be prepared to open up about lawsuits
One of the things your potential buyers want to know about is outstanding litigation. They want to know if you’re suing anyone and if you’re being sued. A lawsuit isn’t necessarily a bad thing, but you’re going to need to explain what’s going on and what your position is in each matter.
8. Gather specifics about top clients and vendors
If your business depends on one client or a few top clients, you can expect extra scrutiny from potential buyers about the business relationship. They want to know that your relationship with your top client is solid. They want to know that your top client is still going to be there after you sell the business.
Be prepared to open up about the nature of your relationship with your top clients. Potential buyers are going to ask a lot of questions about the business you do with major clients and how secure your business relationships are with clients that are make-or-break for your business. Having this information ready to go for potential buyers can show that you’re knowledgeable about your client base and confident in your business relationships.
9. Be patient and wait for the right opportunity
The right buyer likely won’t come along in the first week of the new year. To do it right, it might take the entire all of 2019 to sell your business. Remember that selling your business is a marathon. Gathering the financials, finding the right buyer and preparing the perfect pitch all take time. If you’re in too much of a hurry to sell, you’re not going to get the sale price and terms that you deserve. While you wait, you can get your paperwork and other affairs in order.
Usually, the best time to sell your business is during the busy season. You should sell your business while you’re at a high point. Selling at a low point can mean not getting a fair price for your business. Be ready to wait for the right time to sell so that you’re in a good position to negotiate the right price.
10. Seek expert advice for your business sale
As you prepare to sell your business in 2019, expert advice from an experienced mergers & acquisitions attorney can be crucial to help you arrive at the right agreement. Wilson Ratledge can help you understand what you need to do in order to structure your paperwork in order to make a great showing. In addition, there are important legal agreements that should go into place even as you begin to negotiate the sale.
We can help you identify areas that you can work on in order to make your sale go smoothly, and can help you think through how you’re going to respond to points that might be unflattering. When it’s time to prepare preliminary documents, final documents or employee agreements, we’re ready to provide you with the expert advice that you deserve.
Selling your business in 2019
Selling your business can make 2019 an exciting year. Making sure that you’re prepared can help you command top dollar for the sale. It can help you avoid road bumps that may make the sale difficult. Ultimately, the right preparation can make your business sale the highlight of 2019.