Owning a business can be exhausting. No wonder so few entrepreneurs give much thought to an exit plan. The right business broker is critical to planning your departure, since they can help you review and compare your options, then ensure you choose the right buyer the first time. Whether you’re planning a sale or just considering options for the future, here are five things you need to know before putting your Boston business on the market.
Establish Your Objectives
You can’t assess whether a sale is the right option if you don’t know why you want to sell. You need to ask yourself two questions: What do you need to get from the sale, and why are you selling? The answers to these queries should govern every decision you make thereafter. Consider also the type of sale you hope to achieve. Do you intend to leave the business completely, to sell it off in pieces, to remain on board for some time after the sale, or something else entirely?
Build Your Deal Team
Entrepreneurs must have well-rounded deal support teams to help build and implement the succession plan. You need accountants with significant transactional and tax expertise, as well as attorneys with M&A experience. You’ll also want a personal wealth advisor to help guide you through the decision-making process, and how it might affect your personal finances.
Time Your Exit
While entrepreneurs typically feel most motivated to sell when their businesses are struggling or they are overwhelmed by the stress of running a company, a time when your business is growing is actually the wisest time to sell. Some things you’ll want to look at include:
Get Organized—and Stay That Way
Selling a business requires significant planning and organization. Buyers are inherently risk-averse, and they will want to see documentation of every claim you make. Having the right documentation on hand can help make your company a more attractive acquisition for buyers. Be sure to put these in an accessible location:
Know Your Value
You can’t sell your business successfully if you don’t know what it’s worth. Unreasonable expectations on your end may undermine the deal. Conversely, buyers who see value you don’t make take advantage of your naivete. Work with a skilled valuation expert to discern exactly how much your business is worth. It’s also helpful to identify specific value drivers and liabilities, so you can work to increase value as you get closer and closer to a potential sale date.