Selling your business is an arduous and very demanding task; it is time consuming, stressful and often emotionally draining. Naturally the sale will dominate the owners thoughts and resources during this period and it is very easy for an owner to take their eye of the ball. The key to a successful sale is planning and preparation. Founders should build an exit strategy into their initial business plans, and this strategy should contain information on how the business will be advertised and marketed once the time has come for it to be sold.
Owners who have not been through the process of selling a business before often underestimate how important it is to market, and package their business so that it appears attractive to potential buyers.
As with all things pre-sale, the marketing must be thoroughly planned and executed perfectly. The aim of the marketing period is to drum up enough interest among qualified and motivated buyers to increase the chances of you business being sold for a premium. As many owners, business brokers and intermediaries will testify this is easier said than done.
When attempting to market your business the first place you should start as an owner is your own market or industry. You will know your market better than any business broker or intermediary, and as a result you will know which individuals, companies or organizations will deem your business to be an attractive proposition. If you have decided to market and sell your business without the use of a professional you business for sale will have to find the balance between reaching the widest audience possible and keeping the fact you are selling away from those who do not need to know. Marketing your business is a delicate task, if you do not reach enough buyers you risk entering negotiations at a disadvantage, however if you market to aggressively you may end up alerting vendors, creditors, customers and key members of staff. The fact you are selling, may, in their eyes be an indication that something is wrong, and your business may turn south at the worst possible time. Therefore the marketing of your business must be carried out with the least possible disruption to the day to day running of the business. Once you have identified a list of suitable candidates you would be interested in speaking to you need to draw up a non-disclosure agreement, and following that the chief marketing tool which is the sales memorandum.
There are hundreds of businesses for sale at any given time. To make your business stand out, you need to provide potential buyers with information that will help them to make an informed decision. A descriptive and well-organized sales memorandum will help in the sale process. The sales memorandum is a document which is used to present your company in the best possible light and motivate prospective buyers into making a solid enquiry. The sales memorandum can be prepared by a business broker, an accountant or by the owner of the company. This document will highlight all the positive things about the business and will help whet the appetite of potential buyers.