25 Oct The Solo Seller’s Checklist: 8 Tips for Selling Your Business Independently
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You can certainly pursue the sale of your business without representation, but you will likely not achieve an optimal outcome. The rewards seldom outweigh the risks involved with your life’s work at stake, and there are many factors that you will likely be leaving to chance. Much as a lawyer can get you a better deal in court, a professional Mergers and Acquisitions advisor can guide you through each step of the sale to secure the best possible deal for you in a sale.
If you do choose to proceed without representation, it is critical to understand the business sale process, especially if you are representing yourself in the transaction. In addition to gathering the relevant paperwork, there are things you can do to add value and put more money in your pocket.
Consider the following when preparing for the sale of your business:
- The Valuation Process – Conducting a thorough business valuation is the first step in determining what your business is worth. You must factor in what kind of business you operate, as well as your product category and the age of your business. You will also need access to current and historical financials. You can read more about the valuation process here.
- Getting the House in Order – It takes time to organize all relevant business licenses, certifications, and insurance policies along with financial statements and banking information. You should start gathering these documents 18-24 months prior to the anticipated sale date. The best time to sell a business is while it’s performing well. Plan accordingly by paying attention to your company’s key metrics to identify the best opportunity to go to market.
- Sell Aged Inventory – Many sellers organize a fire sale to reduce aged inventory and minimize shrinkage. Keep only what you need on hand and manage orders carefully to improve margins and avoid unnecessary losses.
- Add Value to Your Business – With enough preparation, you can refine and further develop your digital strategy. E-commerce represents a tremendous opportunity for growth and is an attractive feature for prospective acquirers seeking a business they can rapidly scale. Update your website copy, optimize your product descriptions, create a content schedule to share on social media, and most importantly, launch an effective digital marketing campaign to drive growth and boost conversions. You can read more about pivoting towards e-commerce here.
- Create Superior Marketing Materials – Work with a copywriter to sculpt the narrative of your company’s history. Consult with a graphic designer to create high-quality, visually pleasing offering documents. You want to put your best foot forward. Just as in any business, you never get a second chance to make a first impression.
- Vet buyers – Not all buyers will be a good fit as an owner of your company. Decide what qualities you are looking for in a prospective acquirer and shop the deal to the ideal candidates. You may end up selling to a former competitor or someone you know in the space, or you may forge a new relationship that will benefit you in your next venture. Be clear about what you want and what you are willing to compromise on – don’t settle for less than you deserve.
- Due Diligence – Once parties sign a letter of intent, the due diligence process will be under way. It can take anywhere from 30-90 days to complete, but if your paperwork is in order, it should go smoothly. Ensure your records are accurate and current, but also be prepared to answer any questions that come up.
- Closing – Negotiating a sale is about value. Your business is worth something, both in terms of real dollars and in the amount of time you’ve put into making it a success. Start well above the bottom line and work from there. Most of the time, you will be able to walk away with everything you want while the counterparty feels like they still got a good deal. You’ve done the hard part, now it’s time to reap the reward.
Global Wired Advisors is here to help you sell your Digitally Native or FBA business should you decide to work with an intermediary. We are Mergers and Acquisitions specialists with over 50 years of combined experience in selling online companies. Try our Free Value Estimation Tool to see what your business is worth.
We are committed to providing world-class customer service while earning you the highest value for your business. Our team is standing by – click here to speak with one of our Advisors today!