Maybe you planned it from the beginning, or maybe you took years to decide.
Somewhere along the line it’s time to sell your business, and you want to make sure you’re at the top.
“I sold my business” is a magic phrase for entrepreneurs.
It evokes images of wealth, free time and new exciting challenges.
For many entrepreneurs, it’s the goal from day one.
“Sales may not be everyone’s goal when they start, but it should be,” says Ned Minor.
Mr. Minor is a lawyer for transactions in Denver, and the author of “Deciding to sell your business: the key to wealth and freedom”. It seems that eventually every entrepreneur leaves his company or sits at a table or a stretcher.
The idea of working until the last breath is no longer in our minds when we begin that thrilling roller coaster ride known as “entrepreneurship”. But if you’re not already planning a more graceful exit, you could come out of the stick shortly.
When we start a business, we are usually so busy with the details involved in making it a final success that selling is the furthest thing from our minds. But the day you start building should be the day you should start planning your way out. It should be the ultimate goal of your success.
Many entrepreneurs are successive commercial builders. The fact that they sell a company does not mean retirement for them, it just means the opportunity to start another business that has been lurking in their minds. In fact, many entrepreneurs enjoy building a business almost more than the lucrative success it becomes.
What does a salable business look like? It is salable if it is “scalable”, says Minor. There are small and stable companies sold every day, but big profits are looking for a business that has enormous potential for growth. Every buyer thinks he is smarter than the seller and can double or triple the current business. A company will get the best price only when buyers believe they can benefit from significant potential for future growth.
However, selling a company’s future upside means showing your previous growth and validating your future growth strategy. You should start with 2 years of audited financial data to support historical growth. So prepare to explain your business strategy and how it fits in the general market. Go through the acquisitions you have acquired, then show how many more acquisition targets are still on the market. If through developing new products, be prepared to provide details of your R & D pipeline and your ideas for future products.
Now as for buyers, there are two types. There are “financial buyers” who generally pay a lower price because they have a fire sales mentality. You have to find strategic buyers and paint a picture for them. Show them a great relationship with customers, a great piece of intellectual property, a time-to-market advantage or a key employee. Show the strategic buyer as one plus one equals three.
Then again, why settle for just one buyer when you could have two? Having another buyer on the wings is a vital strategy in the sales process. Having a strong and visible alternative means that any buyer will sit down and take note. There must be tension for the agreement. Each side wants the other to think they are about to leave; it’s the tension that closes the deal.
The best buyers are large, high-altitude public companies with extensive strategic programs and cash. Selling to a public company also has other tangible benefits and benefits. Many transactions leave the seller a handful of shares or, worse, a long-term payment. A quoted buyer makes any cash payment safer. Be sure to make your business more than a sale of your personal network and capabilities. Make it seem like the requested price, especially if you plan to leave after the sale.
Build a strong management team that can move forward when you’re gone. A team with clear policies and procedures and a broad base of customers that underpin value. Your business should not work without you, but be positioned to grow without you. Make sure your key employees receive incentives to stay active after your visit and make sure you communicate with them during the negotiations. It is essential to minimize interruptions.
The sale of a company is complex. If you have been in business for 10 years, then you have 10 years of potential liability, lawsuits and bad accounting. Buyers want to know exactly where the company is located, so maximum diligence and complete disclosure by the user are essential. Sometimes what the buyer requires during negotiations is dizzying and you should hire outside help to put it all together.
Getting the deal closed takes the talent of several people, and here is a list of who you will probably meet on your way to closing.
On the buyer’s side:
CEO: the CEO needs a vision of how the new company will fit into the existing organization.
CFO: this is the person of detail and a professional skeptic. In the long-term vision, he / she will take the heat if reality is not up to expectations.
CPA: the buyer’s CPA (or auditing company) will validate the seller’s numbers. Do not be surprised if the CPA does not support a lower purchase price based on historical profits. These are the “bean counters” of the deal.
On the seller’s side:
Investment Banker: He / she is a professional “quarterback” who keeps the two teams moving towards the goal. Keep an eye on the selling price and the other on the strategic interests of the owner.
Transaction Attorney: It’s the referee – there to make sure no one gets hurt. The attention of the procurator of the transaction is the sales contract, but he / she can also manage the communication with the buyer.
CPA: the seller’s CPA should advise the seller about the personal tax consequences of the deal and how to manage the income after tax.
And you thought it would be easier to sell it than to start it, right? Remember, no agreement is a sure thing until it’s done! Perhaps the only thing certain is that selling a business is never easy. It can be the most excruciating and most rewarding experience in an entrepreneur’s life. Take it slowly, with planning, strategy and guidance. Each phase of the process can add value to society and get closer to the goal.
ما هى VAPULUS ؟
VAPULUS هي وسيلة دفع وتسويق عن طريق الهاتف وأقوى مزوّد حلول مدفوعات في الشرق الأوسط و جنوب افريقيا،
تقوم بتزويد الخدمة لكلا من رواد الأعمال والأفراد واضعين نصب أعيننا توفير
تجربة دفع رائعة للتاجر المصحوبة بمميزات التسويق الرقمي والتحليلات، حيث تتنوع وسائل الدفع الرقمي،
فإن نظام التشغيل يقبل بطاقات الصراف الآلي وبطاقات الإئتمان و المحافظ الرقمية علي حدٍ سواء،
مما يتيح الفرصة لتوفير خدماتنا لفئة الغير متعاملين مع البنوك بحرية.
تطبيق VAPULUS عبر الهاتف يمنح مستخدميه إمكانية الشراء عبر الانترنت والشراء من داخل المحال التجارية
ودفع فواتيرهم بالطريقة المفضلة لديهم من خلال الهاتف أو الجهاز اللوحي أو الحاسب الشخصي.