Questions To Ask Yourself Before You Sell Your Business
You began your business with nothing more than an idea. You created it, built it from the ground up, sacrificed to ensure its growth, and you steered it through all its ups and downs. After all this time, you’ve started thinking about your next chapter.
As you consider selling your business, here are 4 questions to ask yourself:
How much is my business worth?
The harsh reality is that your business is only worth what someone else is willing to pay for it. Coming to terms with a dollar figure placed on your years of sacrifice, investment, blood, sweat, and tears can be a hard pill to swallow. But it’s an important question to ask, so get your business valued. (The Capitalist Alliance offers a business valuation that uses basic financial data and provides you with an initial range of value for your business – get Value here.)
Is my business ready to sell?
So, you’re ready to sell your business, but is your business ready to be sold? Have you successfully created an organization structured to live on past your involvement? Businesses that are clearly reliant on the owner for any significant component of their operations are less attractive to buyers and are less likely to achieve a successful sale. Be willing to change elements of your business to make it more attractive to buyers.
Also, consider, that like prepping a home for sale, making strategic investments in Staging your business can result in a multiplied return. The Capitalist Alliance helps business owners position their businesses for a successful sale at the maximum value through our proprietary Stage process.
What do I want to get out of the sale of my business?
This question might seem obvious, but you’d be surprised to know how many business owners forget to sit down and truly contemplate what they want out of the sale of their business before they launch into the process. How much do you want to walk away from the transaction with, after all taxes and professional fees? Are you open to an earn-out? Do you want to secure jobs for your existing employees after the sale? Is it important to you that the new owners continue to operate under the same company name?
While you likely won’t end up with everything on your wish list, having thought through what you hope to achieve in the sale of your business will undoubtedly get you closer to these goals than going into it blindly.
What will I do after I sell my business?
You’ve worked hard – like really hard – for years, maybe decades. Your work doesn’t end when you walk out the door, even if you are the last one out the door every night. Your business is on your mind 24 hours a day, 7 days a week. So, what is it going to look like when you no longer have your business to occupy the substantial space it currently does in your life? Before selling their company, many business owners focus on the freedom and relief of stress that comes with the transaction, and rightfully so – like we said, you’ve earned it. But the part that many business owners overlook is how their business brought equal parts of stress and purpose to their lives. For people who have productivity pulsing through their veins, this newly-found free time can be hard to adjust to. Acknowledging all the changes that will come with selling your business before the transaction will help you to face the next chapter of your life more prepared.
That’s a lot of thinking to do, but it will be a worthwhile investment of your time.
Now take a deep breath and pat yourself on the back. You’re embarking on the quintessential American Dream – building a business and successfully selling it. And that’s worth some flag-waving.