A business, to survive, takes away a lot of things. And when it doesn’t turn out to be as expected, it’s forced to be shut down.
When closing a company, there are a few steps that you must follow. It consists of going through a broker, picking the right time to sell, and evaluating the strengths of the company to measure the company’s worth accurately.
A few key takeaways you may apply to start directing your selling strategy:
- Firstly, verify the reason for selling your business. This helps shape your plans as to what you want to do next, either retire or open a new business that serves a different niche.
- Prepare your selling plan at least a year ahead. Such is spent to improve your company’s financial records and other factors that appeal to more potential buyers.
- Hire a business appraiser to price your business. Unless you know how much you want and you’re able to determine the company’s worth based on solid statistics, having a business appraiser do it for you is more viable.
- You may hire a business broker to settle the agreements for you if you don’t know how to negotiate.
- Find a buyer that is interested in your company. This could be challenging depending on the time you upload the sale or what the business possesses to attract buyers. After reaching a potential buyer, you will have to go through a couple of other steps before ending a deal.
- The final step: plan out what you want to do with your money.
If you want to learn more about the specific steps about closing or selling selling a company, watch the video below!
Challenges
When selling a company, there are challenges alongside. The 3 most common challenges are employees, offer evaluation, and motivation.
When selling your company to someone else, your employees are usually the ones being affected the most. Most will feel insecure as they don’t know where the whole selling thing is going and whether they should find a new job as a backup plan.
A few steps will help ease the situation down on the employees’ side which includes:
- Update the employees with your plan to sell the company at least a few months in advance
- Reassure your employees by answering all of their questions
- Support your employees if they have any further requests
- Always keep them up-to-date
Low offers can also be another big challenge that a business seller go through. As selling a company is difficult and requires patience, don’t get fooled by rushing in someone who immediately offers to buy your company with an extremely low offer.
A business appraiser will help you do the work, as mentioned. A small fee is charged but it’s safe and it ensures to get the most value out of your business’s worth.
Lastly, motivation matters. The selling process takes a lot of time to end the deal. Even when you have found a potential buyer, it takes a couple of months more to let the final agreements come to the table. And there are times when the transaction is about to go down, the buyer changes their mind which makes you want to give up. However, remember that you have successfully established a company on your own. Therefore, don’t let any difficulty stop you from reaching what you pursue.
To learn more about the process in valuating, closing or selling a company you can have a look to this guide on Movetoasia.
Also, even when you start to plan out all the documents and strategy work to sell your company, do not abandon your business. An impressive financial record always likely gets more buyers instead of a dying one. So, keep the company busy, try as hard as you have been to improve it, and be patient to collect the rewards at the end.