Things to consider when Selling your Business ? Part 3

There are a number thing's to consider before selling your business. In this article we will discuss the following:

Competitors: Be prepared to answer questions by your purchaser regarding your competitors. They will be looking for reassurance that your business holds its own in the market place and will continue to do so. As in all cases of purchase, it is a buyer beware situation, however if you have positive information to support your business sale, in terms of competitors promote it.

Your purchasers will be looking for your edge over the competition. Think about what this may be, and point it out in your documentation and discussions. Your purchaser will be looking for potential they can exploit in your business.

However also protect this vital information. Information about your business, particularly that regarding customers, is integral to the success of your business and therefore highly valuable to you, so protect this information right from the very early stages of negotiation onwards. Ensure that all those with access to your business information signs and adheres to a confidentiality agreement.

Suppliers: Suppliers are a crucial part of your business and your purchaser will seek assurance that the current arrangements have flexibility and transferability. This is likely to be a big selling point to your prospective purchaser.

Customers: The sale of your business is, for obvious reasons, crucially dependent on your current and potential customers. Any reliance on one, or few customers, is unlikely to be attractive to a business purchaser, so focus on spreading your customer base as much as possible as you prepare your business for sale.

Are your contracts with your customers transferable to a new owner? Will your current customers be willing to transfer their custom? How attached are your customers to their personal relationship with you? When will you tell your customers of any potential or actual sale? As with your suppliers, however even more so, you need to consider the answers to these questions and plan to manage these situations to your best advantage.

Staff: Will the new owner want to retain some or all of your current staff? Are you worried about the future of any staff members? Will your current staff move easily to a new owner? How integral to the ongoing success of the business are your staff members? When do you tell your staff of any impending sale? The answers to all these questions have implications on the ease of sale and transfer of your business.

Employee entitlements will need to be paid out or transferred to the new owner. This value will be assessed and effect your sale price so you will need to take this into account, when assessing the final net proceeds of your sale proceeds.

For confidentiality reasons, and in the interests of staff continuing to feel secure, it may be preferable to meet with and show prospective purchasers through your business after hours, when staff are not on the business premises.