Everything you need to know before selling your company

The current economic crisis has forced many companies to abandon and sell their businesses. Selling does not necessarily mean failure. In fact, quite the contrary. Given the circumstances, this transaction can be a potential financing mechanism for business growth.

“Entrepreneurs increasingly consider selling their business as an opportunity, not a failure. If they know how to find the most suitable buyer and negotiate the best transaction mode and price, it can result in a highly beneficial deal for all parties involved.”, explains Manuel Urrutia, a specialist in corporate law and mergers and acquisitions and Confianz’s CEO.

To get a win-win outcome from this transaction, it is essential to be meticulous and organized throughout the process. There are several steps you should follow if you want to sell your business:

  • Plan the sale in advance. It usually takes at least twelve months to complete this process. For this reason, it is wise to plan the sale of your business at least one year before. Anticipating is always the key to success.
  • Choose the best time for your sale. In most cases, the best time to sell your company is when it is growing since buyers buy with expectations.
  • Seek legal and financial expertise. To ensure that the transaction runs as smoothly as possible, expert guidance is highly recommended. Thus, hiring financial, legal, tax, and business advisors will be crucial.
  • The value of your business is not just a number. Establishing a realistic selling price is critical when taking your business to the market. As important as a realistic price is also researching the market. This way, you will know who acquired companies like yours in the past and tailor it to their needs.
  • Update your balance sheet. Before proceeding with any sale, it will be necessary to perform due diligence, where the buyer will carefully examine your accounts. It is, therefore, advisable to have them audited by a reputable firm. This way, the buyer will feel much more comfortable. In addition, you will be able to know the weak points beforehand and have the opportunity to clean up the accounts before the purchase.
  • Prepare your company for the sale. Think about the KPIs that the buyer will be looking for, but be careful! It is important not to exaggerate. If the selling is unsuccessful, you will be mortgaging your future.
  • Coach your team. The company’s key workers must be in line with the sale. Consider including some benefits in your deal, such as a bonus or a new responsibility within the company after the sale. Don’t forget to prepare the rest of the team so that they can operate without the founders. Start delegating and reorganizing internally in plenty of time.

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