If you’re looking to sell your business, know that the process is complex and requires a real attention to detail. As your trusted business brokers in Utah, we at Utah Business Consultants have been helping our clients handle every element of these details for nearly three decades.
Unfortunately, there are a number of prevalent myths in the exit planning world. Just like any other common area of business, misconceptions spread like wildfire among the uninformed. Let’s tackle some of these key myths and set you straight on the facts.
You’ll have a solid target area for your asking price while selling a business, but it’s foolish to assume that you’ll simply be able to dictate the exact terms of the deal to your potential buyers. Market factors change in a hurry, and even if you’ve sold a similar business with a different valuation in the past, this may not be relevant even a few months later.
Focus on a range of prices you’d be comfortable with, but be willing to adjust your expectations based on the market. In addition, don’t assume that any negative business issues – employee practices, unsolved litigation, etc. – won’t affect your valuation. They will, and you need to factor them in.
You may have various experts advising your business in some capacity – CPAs, estate planners, attorneys and the like. In many cases, the responsibilities of these people don’t extend to potential exit planning. They may not even be consciously aware of potential plans to sell. They also may not be qualified to advise on certain areas of the business, including exit strategies. Make sure this is all very clear in advance, and don’t lean on unqualified help.
It’s a myth that you can control the timing of your sale, and set it up perfectly to execute at the time when market factors are perfect for your sale. You’re ignoring market activity, industry shifts and several other factors here. Instead, the better rule of thumb is to look to sell as your business is producing solid growth, not once it’s reached the mountaintop. Buyers will see potential here, rather than a product that’s already peaked.
Perhaps worst of all, assuming you can complete the sale of your business adequately – all without interrupting daily business tasks – is often foolish. This is an extremely time-consuming process, and the most absolutely vital time to keep your business’s daily operations at a high level is during this sale process while potential buyers are looking closely at you. Lack of knowledge in the business sale realm is another huge roadblock to the sale process which often kills deals.
This is what the brokers at Utah Business Consultants are here for. We know the ins and outs of this game, and we’re dedicated to only this area of business while you continue to focus on the others. Speak to one of our brokers today to find out more about our services.