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5 Things to Know before Selling Your Business

Selling your business is a difficult and emotional task but that doesn't mean that you should take it lightly. It is essential to know some basics before jump in for sale.
BY Akshay Arora
Feature Writer, BusinessEx
Aug 18,2017

Taking a decision to sell a business is not an easy task, as it takes a lot of time and efforts of a person to initiate a business in the first place. Sure, you will find it hard at the beginning but if you have lost interest or having another priority then selling is not a bad thing as you will have new experiences to look for in life.

If you are thinking that selling is an easy task, well you are wrong and have to change your mindset because you will not be able to find a buyer easily. Well, there is a solution to this problem and that is BusinessEx.com, a platform that gives you the opportunity to showcase your business on the platform so that interested buyers will be able to contact you directly and you can also send proposals to buyers. The platform has a database of 3 Lakh+ investors that are seeking to buy a business-like yours. You just have to register to use our services.

In order to seal the deal for your business, there are 6 things that you must know before selling your business.

Think from Buyers Perspective

Before selling your business, it is essential to know what a buyer wants from your business. You should start thinking like a buyer and start planning to make changes in your business that might affect buyers decision. For Example: if your business reputation in the market is not good, then the buyer will not be interested to buy your business. So you should start building your reputation and good relations with customer, suppliers, distributors etc before selling your business. Goodwill is one of the major factors affecting buyers decision.

Process Involved in Selling

It is significant that you do some research on the process of selling and try to understand the essentials of it before initiating it. Lets find out what steps involved in it:

  • Valuation and Maximizing Value
  • Confidentiality
  • Engaging Buyers
  • The Offering Memorandum
  • Management Meetings
  • Negotiation and Deal Structure
  • Letter of Intent and Term Sheet
  • Due Diligence
  • Closing Documents and Process

Hire Professionals

Well, you are not a specialist in selling a business which you already know, so it is important that you hire professionals like a lawyer accounting firm as they will be able to get you the best price for your business.

Prepare for Queries

You should know that buyer must be having some queries regarding your business. Questions that buyer could ask from you are:

  • Why do you want to sell your business?

  • Will demand exist for the business' products and services for years to come?

  • Are there any holes in the financials?

  • What are your biggest challenges right now?

  • Do you have any past, pending or potential lawsuits?

  • How well documented are the procedures of the business?

The faster you respond, the more transparent you are, and the more you disclose, the more convinced the buyer will be. So be prepared to answer the questions with honesty and gain buyers trust.

Maintain Confidentiality

You cannot maintain confidentiality if you are trying to engage with a buyer on your own. So in order to maintain confidentiality hire a business broker or an MA advisor. A business broker will help to locate a buyer and protect your confidentiality, while an MA advisor will also help value your business, write the Offering Memorandum, help negotiate the price and terms, and manage due diligence and closing. You should also engage in Non-Disclosure Agreement(NDA) with the buyer, in order to maintain confidentiality.

Conclusion

These five things are the basic things that you must know before selling a business. So, you must be prepared before selling your business and plan in advance to stay on the safer side. You must know that BusinessEx.com is the best platform for you as it specializes in selling/buying business and also has the provision of services that will simplify your problem. This platform maintains full confidentiality of your business, assists you with valuation service and helps you find the best buyers available.

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