If you are thinking of selling your business, this section is for you
Step One: Getting Ready.
Step One involves getting ready to sell to business. Tasks include
- Developing a profile of the most likely buyer (is it a local competitor or a national (or global) firm? Is the buyer likely to be in your industry, or rather in a related industry seeking to expand into yours);
- Prepare the information about your business, the right information that you prepare is the key to a successfull sale.
- Prepare a written information pack for any potential buyer, if you are prepared in advance with the right information at hand your are less likely to loose any potential buyer when you start to market your business.
Step Two: Create A Database Of Potential Buyers.
Step Two is building a list of 75-100 prospects representing the people most likely to buy the business. Since the ultimate buyer is often someone the owner already knows, or knows of (local competitor, friend etc.), many of the names on the list will be familiar. The database is where you will focus the search for the ideal purchaser; every listing on it should include the (verified) name, title, mailing address, phone number and possibly email address of the prospect; all important because each will be personally called.
Step Three: Contact Best Prospects. Now the selling process starts in earnest. You or your agent contacts the 25-50 most promising candidates by certified mail. You or he calls those prospects about a week after the mailing to determine the level of interest. If the prospect is interested, he secures a Non-Disclosure Agreement and provides the Information Package.
Step Four: Negotiate A Deal. At this point, in the ideal world the principals (the seller and the buyer or buyers) negotiate with each other to determine whether or not a deal is possible, and if so, on what terms. The EPOS valuation is particularly valuable here. Usually this process involves considerable “due diligence” on the prospective buyer’s part and Step Four may last months. If you are not used to handling these kind of negotiations then find someone who is.
Buying a Business
Financing a Business
Create a Business Plan