Selling your business without selling your soul

What does selling your business cost you?

You shouldn’t have to compromise who you are, or your most important values to sell your business.

In previous posts, we have discussed the importance of running your business as though it were your intention to sell it, even if that prospect is many years away. A potential investor is going to want to see that your business is a well-organised profit-making machine, but let’s be honest that same vision should be shared by you, or your business is but a time-consuming hobby.

For many business owners, their business sale is so much more than a means to a greater financial reward and that’s what this post is all about.

Of course, the financial aspect of a business is paramount, but your business is so much more than a web presence or a bundle of commercial bricks and mortar. Your business is the brand that you created from nothing, perhaps sitting alone tapping away at a computer in your parent’s cold, damp garage night after night – hard work, sweat and tears spent turning your passion into a successful money-making venture.

We understand that you want to get a good price for your company, but we also understand that your business sale can also be incredibly personal.

Why are you selling your business?

The motivation behind the decision to sell your business can be very enlightening and will often lead you to the best strategy to find the right buyer. It may even lead to a decision not to sell at all, but rather enlist the help of another individual or change your original vision for something that is more powerful.

There are many reasons why a business owner would want to up stakes and move on:

  • Retirement.
  • Can no longer satisfy market demands with current skill set.
  • Passion for the company is no longer there.
  • Desire to move onto something new
  • The loss of key personnel has made business operations nearly impossible.
  • Stopped being financially feasible under the current regime.

There are more but the above is a selection of the reasons wesellanycompany.com hear from business owners across the UK.

It is not always appropriate to sell a business.

Sometimes, the preferable solution is to take on a new supplier or employ the assistance of an investor to allow you to ramp up your marketing efforts, purchase machinery or hire specific specialists.

Outlining exactly why you are selling your business and your ideal ‘next steps’ for both you and your business will help clarify what it is you want from your prospective buyer.

Remember one of the biggest prices you pay when you sell your business is that you are no longer in control.

What do you want from your buyer?

Your business is part of an ecosystem in which staff, suppliers, partners, and customers all play their part. Just how your new buyer intends to service that ecosystem can have a significant impact on how happy you are to sell your business to them.

If you are out of the picture once the sale goes through that means a new element will be introduced into the existing operation. This significant element may mean that your business can be incorporated into a much larger corporation. It might mean components that you viewed as significant are treated with less importance or removed altogether.

Existing staff and suppliers are at the mercy of the new owner and that is something you will have to make your peace with. If this is difficult for you, it makes sense to try and connect with an investor whose vision is more in line with your own.

Not all business sales mean that you will leave the business right away

The transaction may have been an exit plan for you, in which case your task is to use your newfound freedom to build an identity for yourself that doesn’t revolve around your business. But if you stay, you will be dealing first-hand with the consequences of the decisions you made as you sold your business or took on a new investor. This is just one of the reasons that taking on the right investor is pivotal when considering whether to accept an offer.

Is the best price the best option when selling your business?

If all you are interested in is the bottom line, and you are quite happy to wash your hands to the fate of your brand, staff, suppliers, and customers, then it’s a simple case of:

  • Run the company well, turning a healthy profit with aspirations for potential growth then take the highest offer.

Quite often the offers won’t match your required financial investment and then you have a decision to make:

  • Revaluate what you are willing to accept.

OR

  • Accept the lower offer.

OR

  • Wait for a better offer.

This is not the only reason you might want to wait. Let’s suppose the offer matches your financial goals but you’d like to see the company you have built up from nothing go to someone who will treat it with the same respect and care as you have.

Look at the abovementioned options and apply them for personal reasons rather than financial reasons. You will end up with a list something like this:

  • What type of company leader are you willing to accept?
  • Would you be willing to accept a lower offer from a person or company that stands closer to your own values?
  • Would you be willing to wait for a buyer who is offering more than money?

Spend the time getting to know your investor

Spending the time to get acquainted with your buyer is not something that will be traditionally advised by the brokers and financial advisors connected with your business sale. That’s because their interest in your company is purely financial. They can never be as connected to your brand as you are.

Spending time with serious investors means you can broach the hard questions regarding their intentions with your company.

How to find an investor that will carry your vision forward.

It’s marketing 101 here and quite specialist. At https://wesellanycompany.com we have an outreach marketing department and an ever-growing database of investors. We match business owners with their ideal buyers and that doesn’t just mean the investor willing to pay the most but also the backer who is most likely to share your own goals and objectives for your brand.

You can simply hand that responsibility over to a company such as ours or you can do some of the leg work yourself. If you choose to do the latter, then here are a few tips and tactics to put you on the right path:

Are your competitors interested in purchasing your business?

You’ve been battling with them for market share for years but now may be the perfect time to take their image down from the company dartboard and give them a call. If you like the way they run their business then they may welcome the opportunity to incorporate some or all of your business into their existing operation.

Are your existing suppliers interested in purchasing your business?

You already have a positive relationship with your existing suppliers, and they are already familiar with your operations and the way you do business. It can sometimes be the case that the suppliers would see the benefit in buying your business rather than losing an existing revenue stream.

For those businesses whose survival depends largely on one element, a particular supplier, for example, selling to that supplier would in all probability give you the best possible price and be handled in a way that is more in keeping with your own vision.

Finding the right buyer is quality over quantity

Some ‘business for sale’ listing sites will boast thousands of site visitors which may seem initially very impressive. They may take to Google to write ads that aim to get as many people as possible to click through and they achieve their objective:

  • Some of the right people click through.

AND

  • A lot of people who can’t afford to buy your company.

AND

  • A lot of people who have the money to buy a company but not yours.

AND

  • People who might want to buy a company someday, but not today.

AND

  • People who want to buy your company but don’t share your vision or your moral and ethical values.

Define your ideal business buyer

You will already have written down what you expect from a financial standpoint. It is definitely worth taking the time to also outline the type of future you would like to see for your company once you are gone. Doing this will help you define the ‘type of person’ needed to take the reins.

When you write your adverts and business listings don’t be afraid to target ONLY the people that match with your ‘ideal buyer’ vision. It will be more cost-effective, can stand a chance of ranking high on Google (depending on how you do it) and will certainly deliver more positive results faster.

Well, that’s about it for now. If you want help getting the right investor for your business then click here and one of our team will be in touch.