My partner, Dennis Kelley and I recently invited a group of clients and strategic alliances to meet with us and Business Broker, Kipp Krukowski from Sunbelt Business Brokers to explore the really important things to consider before selling your business.
In addition to leading the dialogue on what is the value of your business, Kipp told the audience that the time to ready the business for sale is not at the last minute. The right time is perhaps ten years and no less than three years in advance of the proposed sale date.
The fact is it takes considerable planning to sell anything. In particular it takes time, planning and significant effort to sell a business. Kipp has developed a list of 50 things to consider when planning to sell your business – here are the first 25:
1. Understand different types of buyers
2. Understand how to calculate Seller's Discretionary Earnings
3. Understand different ways to value a business
4. Understand that different buyers pay different prices
5. Understand deal structure - asset vs. stock
6. Understand seller financing pros & cons and how to structure
7. Value stream map processes and materials
8. Clean facility
9. Improve appearance on the internet
10. Solidify workforce
11. Cross train employees
12. Create employee manuals
13. Understand the sales process and timeline
14. Emotionally detach from the business
15. Remove non-operating assets
16. Formalize contracts with customers
17. Formalize contracts with suppliers
18. Clean up legal issues
19. Understand the "true" value of the assets
20. Repair / maintain equipment
21. Sell excess inventory/write-off obsolete inventory
22. Collect aging accounts receivable and make them current
23. Remove unnecessary family expenses
24. Understand the "net" after the sale proceeds
25. Create a control plan for quality control
I’ll share the other 25 things sometime in the future. Meanwhile, Dennis and I would be happy to talk with you regarding the planning for selling your business. More importantly we can discuss creating value in your business (before its sale) by using the above considerations.
We call it : “Building a commercial profitable enterprise that works without you.”
Monday, June 9, 2008
Twenty-Five Things to Consider When Selling Your Business
Subscribe to:
Post Comments (Atom)
2 comments:
Great list! This is helpful for me because I'm helping my dad prepare to sell his business. Trouble is that I'm not sure where he should advertise the business for sale. Would you have any suggestions?
@Jess-- I would check out your local Chamber of Commerce. They should be able to help you. Also check out BizTrader.com. It's a global marketplace where you can buy, sell, or invest in a business. It's also really inexpensive to post your business. It's even free right now for a regular listing. The premium also posts your business on other search engines for you. Check it out sometime and good luck!
Post a Comment