Most business owners will come to a point where they need to sell – whether to prepare for retirement, allow a change in lifestyle or move on to the next challenge. However, selling a business is a life-altering and often difficult decision. It’s no surprise that fears and concerns can appear when looking to sell your business.
At UKBA, we have many expert advisors that know what makes a successful business sale from experience. We have shared some of the fears associated with selling a business and how to overcome them to ensure the process runs smoothly.
Research suggests that 75% of business owners feel one significant regret after their sale because they hadn’t thought it through enough. By forward-planning and considering the factor that will determine the success of your sale, you can ensure this regret does not apply to you.
The most common fears:
- Getting the correct market value
One of the most prominent fears is not achieving the market value you want. Many owners selling their business have no idea how to value their business, making getting the best price challenging.
Often, the first thing they will ask for is a free valuation to understand better the sort of offer they should be looking to accept. However, they would benefit most from a conversation with a broker to devise a marketing strategy that enables them to achieve the best possible offer. This means you can leave with a fair price for your years of hard work with the business.
Another common fear is confidentiality. Some sellers do not wish for their customers, suppliers or staff to find out about a sale before the deal has been agreed upon and a formal, positive announcement can be made. If the news is leaked before then, there’s the risk that people jump to conclusions and assume there’s something controversial at play. Depending on the nature of the business, some people will also be conscious about upsetting their supply chain by selling to a competitor or creating uncertainty amongst employees about their jobs.
In order to retain confidentially, you need to ensure the sale is handled by professionals who can remain discreet while structuring the deal in the background.
- When do I get paid?
Knowing when you get paid is another fundamental concern. A seller usually wants their payment upfront, or at least to understand the value they will receive from the sale before handing the reins over to the new owners.
Some sellers may also be concerned when deferred payments don’t appear – especially if they are relying on it for their retirement or lifestyle change they have worked to achieve.
In this instance, our advice is to prepare your business correctly for sale, making it an attractive proposition – and then go and find buyers who can afford your business. This will enable you to access a fair price for your business without fear that you may not get the money you want when you want it.
- What will happen to my legacy and staff?
If you have been running a business long-term, you will likely have forged a reputation and vision for that business. You will also have created strong relationships with your staff, particularly if you have worked with them for years.
For this reason, many owners are concerned about what will happen to their legacy and employees once they sell. Some sellers are even willing to accept a lower offer to ensure their workforce is safe and their brand name continues long beyond the sale.
To alleviate this concern, you need to focus on who you sell the business to. Ideally, you want new leaders who embody similar values and can maximise the potential of your business without making controversial changes that leave staff at a detriment. By making your company as attractive as possible with an effective pre-sale strategy, you can increase the chances of this happening.
- Not being able to sell successfully
Finally, many sellers worry that they won’t be able to sell their business and question whether they have created something of value.
Again, good preparation in running your business and the sale process will make it a desirable asset that others want to own. It’s worth discussing with an advisor to identify what can be done to optimise your company to make it more compellers to potential buyers.
A skilled business broker – like those at UKBA – can support all these issues, from preparing you and your venture for sale to developing the right marketing strategy that improves your prospects. A good broker should also protect your confidentiality, find the best buyer and arrange a deal structure that protects everyone involved. This should address any fears you have about selling.