In part one of this two-part blog series, we went over some of why it’s important for those attempting to sell their business to be prepared for surprises along the way. Selling a business will follow some general steps, yes, but there can be a few unexpected hiccups you have to be on your toes for.
At Utah Business Consultants, we’re proud to provide assistance with any area of exit planning or selling your business, including preparing you for any surprises that may show up during the process. In today’s part two, we’ll dig into a few areas of price flexibility, confidentiality and keeping a focus on your business even while it’s in the process of being sold.
As the seller of a business, you’ll have a general price in mind when it comes to selling. You’ll usually want to be aggressive here and post a strong pricing structure.
A reality many sellers are not fully prepared for, however: The first offers here will usually come in significantly lower than the price you’ve listed. You have to be ready for this, as it’s simply part of the negotiation process. Rather than simply being insulted and turning down all offers that don’t meet your threshold, you should work with an intermediary like ours to set a price structure that can work for both sides and allow for good-faith negotiation.
We mentioned confidentiality in part one of this series as it relates to your own operations and involving managers or other staff members, but there’s another side of this to consider as well. In some cases, particularly if your business is well-known locally or nationally, word may leak out that it’s for sale or the confidentiality may become exposed.
You must have a contingency plan in place in case this happens. This is usually just a simple explanation that growth capital is being considered or expansion is being investigated.
While we understand many business owners are used to being in charge and want to retain this control during the sale process, it’s important to realize that there are areas where flexibility is vital. While standing firm on a few major price points or sale contingencies is fine, demanding your way on every single item ultimately won’t lead to good results. Be prepared for some give-and-take during the process.
Finally, one of the chief reasons why business sellers employ business brokers like ours is to allow them to retain their focus on the business. Your business doesn’t suddenly shut down when you consider selling it – maintaining its operations is vital for keeping its value high until the sale goes through. Buyers will want to know how the business operates, even during a potential sale period.
For more on being prepared for unexpected events during a business sale, or to learn about any of our business valuation or exit planning services, speak to the staff at Utah Business Consultants today.