When it’s time to consider a sale, most small business owners have two objectives – a timely deal and an attractive price. Sometimes, however, these goals aren’t in harmony. Sellers with a “sell my business fast” mentality may settle for less, while those who aim to maximize value may struggle to close their deal.
So how does one square that circle? The answer is simple – by following a smart sales strategy that’s designed to keep both objectives in alignment. Owners shouldn’t focus on how to sell a business quickly, but rather how to sell it the right way, at the right price, and in the fastest possible timeframe.
With that in mind, let’s take a closer look at seven steps business owners can take to attain a faster sale, without compromising on value.
1. Prepare a Business Summary
Many business owners become understandably frustrated when potential buyers express interest, solicit information, and then drop out without much explanation. This often occurs because buyers have a limited understanding of the company they are targeting. Once that understanding begins to crystallize, they realize it’s a poor fit.
Sellers can radically accelerate this process by crafting a comprehensive business summary – a 10 to 20-page document that addresses all of the important questions a buyer is likely to ask. Creating this document not only clarifies things, but it can also enhance the value of your business by delineating its strengths while reducing any chance of post-sale litigation.
2. An Aggressive Marketing Push
The best way to ensure a prompt sale is to define and understand your potential market. By identifying your ideal buyer, you can tailor your marketing and advertising messages toward that specific buyer persona and do so in a confidential manner.
3. Pre-Screening Prospective Purchasers
Few things are more disappointing than having a potential sale go haywire because the buyer can’t get qualified. Such situations are a serious waste of time and money for everyone involved.
In order to minimize the odds of this kind of scenario unfolding, it’s imperative to pre-screen buyers. When you receive a lead, tell prospects that you’re willing to forward them a complete business summary, provided they sign a non-disclosure agreement (NDA). This step will get rid of any unserious buyers.
Additionally, you may wish to ask pertinent financial questions as part of the NDA process. Determining how well capitalized a potential buyer is can help you make a more informed conclusion about the likelihood of qualification.
4. Arrange an In-Person Meeting
Early in the sales process, potential buyers will often barrage sellers with emailed questions about the company. Answering these questions in a piecemeal fashion is a waste of time for both parties.
To streamline things, it’s advisable to suggest an in-person meeting where all questions can be fully addressed. Ensure the buyer has a copy of your business summary and ask them to send questions to you prior to the meeting.
Once you’ve agreed on a time and place, make sure you’re thoroughly prepared. It’s also important to remember that you have the right to request additional information as well, so don’t be afraid to ask for more financial data.
5. Ask for an Offer
The most effective way to separate buyers from browsers is to request an offer. At this stage, there’s no need for a formal process with accountants and attorneys – just get the general framework of a deal on paper. Once terms are agreed upon, you can proceed with formalizing a settlement.
Negotiating a sale price is often the most challenging aspect of a deal, as it requires extensive knowledge of not only the business but also the broader market in which the business operates. For this reason, it’s often a smart idea to work with a business broker. Because business brokers are experts in terms of valuations and negotiations, they can help ensure that your deal is fast and fair.
6. The Importance of Due Diligence
During any sale, it’s critical to do your due diligence. Create a checklist to help you navigate the process and keep the momentum going. You may also wish to seek the help of a professional to identify any potential problems that could serve as deal breakers.
It can’t be emphasized enough how important due diligence is in terms of facilitating fast and successful sales. By staying organized and managing each step of the process closely, you can anticipate roadblocks by surfacing key information that could otherwise derail a deal right at the finish line.
7. Get a Head Start on Closing
Many business owners don’t worry about closing until the last possible moment. However, it’s smart to get ahead of the process by preparing at least two weeks early. By doing so, you can help ensure that you conclude a successful sale without any last-minute complications.
It’s possible to sell your company fast – and for the right price – as long as you do things the right way. For many owners, that means working with an experienced business broker.
If you are looking for the best ways to sell a business, you need the support of a trusted business broker in CT. For more information on selling a small business or to set up a consultation, contact VR New Haven today.