How To Sell Your Business From Deal Marketing To Due Diligence?

Such a phenomenon as the sale of a business today is quite common. The owner decides to take such a step for many reasons: he decided to change the type of activity or niche in the market, and sometimes the cause is unprofitable production. And here, the question arises – how to sell a business?

The main stages in selling business

During a crisis, the number of people willing to sell their business rises sharply, and the number of buyers also falls sharply, despite the positive assurances of business brokers that now is the right time to buy a business. First, you need to understand at what stage the market is. Is it growing, stagnating, or declining? It is important since the most real buyers are competitors or companies operating in adjacent markets.

So, the entire process of selling a ready-made business includes the following stages:

  1. Training

At this stage, you need to do the following actions:

    • obtain an audit report;
    • revise all your existing contracts so as not to leave unpleasant surprises for new owners;
    • try to increase the value of your business, for example, by extending the lease on the premises where your company is located today;
    • prepare a package of accounting documents that a potential owner will probably want to view;
    • get a certificate from the bank that you have no debt or indicate the amount of this very debt.

2.Marketing plan

Business people are business people who value their time and respect those who value their time. The new owner may not want to deal with the purchase of your business personally but entrust this matter to his lawyer or accountant, but the marketing plan must be prepared in any case. It will include:

      • a description of the goods you produce or the services you provide;
      • an overview of your customer base;
      • indication of direct competitors;
      • market outline;
      • description of business policy, etc.

3. The evaluation of the business

Price formation is one of the most important moments in selling a ready-made business. If you price it too cheap, you will be at a loss; if you are greedy, you will scare away all potential buyers. In this case, due diligence is the right procedure to form a reasonable price.

Due diligence: how to evaluate the business

Selling a business is a natural stage in the development of a company. And the success of a business project is directly related to the price buyers are willing to pay. Of course, the company’s owner is interested in the highest possible valuation of his business. Therefore, it is important to adequately evaluate the company before selling it to minimize the difference between the seller’s expectations and the buyer’s readiness. There are many valuation methods that entrepreneurs are unlikely to be able to delve into without the help of specialists.

Conducting due diligence before the transaction makes it possible to obtain reliable financial and legal information on the feasibility of investing in the acquired objects and potential legal risks. The information obtained allows investment market participants to make effective strategic decisions and reduce risks. As a result, the customer’s company receives an objective analysis of the investment object’s economic, financial, and legal activities. Since experts from different fields participate in due diligence, the final report (conclusion) includes the conclusions and recommendations of all specialists.