The sale process can be a wild ride but there are ways to
smooth out the bumps.
As I mentioned in
Part 1 of this series, selling your business can come at a high
emotional cost. There is a great deal of money at stake and the
sale represents the culmination of years of hard work. To add to
the stress, selling is a complex process with many ups and
The key to minimising the pain and increasing your chances of
success is knowledge and forward planning.
Understanding the process and planning ahead puts you in control
and makes the journey easier. Yet many sellers avoid or delay
seeking advice and making plans. I hear many reasons, from "I
had no spare time" to "I don't know where to
There are always reasons for not being prepared. But if you want
to reduce your angst when the pressure is on, consider these
1. Ask questions
Having answers to key questions will provide clarity and help
with upfront decisions. Good questions to ask your advisor include:
"How do I find the right buyer?" "Should we conduct
an auction with multiple parties or deal exclusively with a single
party?" and "How will confidential information be
Once you have answers to these and many other questions, you can
agree on the best sale process, rules and timetable.
Don't be afraid to ask questions during the sale too. Are
you worried about buyers talking to customers or staff? Ask. Does
the preferred buyer have the money? Ask. It doesn't matter how
many questions there are – it's important that all your
questions are answered.
2. Get support
To answer your queries, you need an advisor with insight,
patience and experience. To manage and engage with buyers, you need
a confident, persuasive advisor who has done this many times
The ideal person will: understand your business and your
industry; have a proven sale process and be able to plan the steps
with you; be easily accessible; respond to queries promptly; and
keep lines of communications open between everyone involved. They
will be so on the ball, they will answer important questions before
you've even thought of them.
3. Set the rules
To feel in control, set clear parameters from the start about
how you want the sale process to be conducted. This should include
the type and approximate number of parties to approach and the
extent of information flow with these parties at various stages of
It's important to be open with your advisor from the start.
Your preferences could have implications for competitive tension,
the strategic value that can be realised, the timing of the sale
and other factors. A good advisor will set your mind at ease about
aspects of the process that worry you, such as how to prevent
competitors using the sale to obtain confidential information about
4. Keep calm
Never underestimate how emotionally draining and time consuming
the sale process can be. Without proper management, it's likely
to be a big distraction from running your business.
For SME owners, your business represents far more than a
collection of assets and an income stream. The stress of selling
can be worse if the sale is being forced by poor health, financial
woes or other external circumstances.
Whatever your situation, try not to let the sale process be
hijacked by emotion, as poor decision making can ensue. Be guided
by your advisor, because they will be your best source of
practical, objective and unemotional advice.
Above all, keep your eye on the end game: achieving a good sale
price on your terms. Your ability to do this hinges on finding the
right buyer, so it is my topic for Part 3.
On 12th November 2016, new laws will commence to protect small businesses from unfair terms in standard form contracts.
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