Ten things to consider if selling a business
1. The mission. What is the purpose of the business? Is there an end goal, or can the firm continue into perpetuity?
2. The plan. What is the long-term business plan, including the time horizon? What happens if severe health issues or death suddenly occur?
3. Accomplishments. What defines success for the organization? What accomplishments still need to be attained and how much time is needed to achieve them?
4. Marketing. What marketing tools are needed to attract buyers? What information is needed in the communications (e.g. firm history, track record of services and products provided, client makeup, client satisfaction levels, financial reports, sources of revenue, recent growth trends, staff interested in staying involved, etc.)
5. The value. What approach will you take to value the business and what are the tax implications? What percentage of income is reoccurring? How will the deal be structured? Is it a one-time transaction or are their payouts spread out over multiple years? Is financing needed? What impact can market fluctuations have on the time horizon and price? Are there more buyers or sellers? Is there urgency for the buyer (or you)? Are there expenses that can be eliminated to increase the firm’s profitability?
6. The buyer. Is there a successor within the firm? Will a family member inherit the business? In either case, what training is needed over what timeframe? Is the buyer compatible? Will the buyer provide the same high level of service? What are the buyer’s motives? What other due diligence needs to occur? Is a continuity partner in place in the short term, in case of emergency?
7. Your legacy. What if anything will live on (e.g. brand name, etc.?)
8. The stakeholders. Who will be impacted, including, but not limited to, your clients? How will they learn the news and from whom? What communications are needed?
9. Continuity. Will you need to stick around to provide a smooth transition and to ensure client retention? If so, what are the terms of the agreement? Will the staff be retained?
10. What’s next? What’s the next chapter look like? What activities will fill your time? What is needed to achieve your dreams? Is any preparation needed?
If you are interested in selling your business at some point, plan ahead, as these transactions can take years to come to fruition. Reach out to Byrnes Consulting early in the process to help develop a sound strategy.
