You sat by the pool over the weekend after an exhausting six week run in the business. You finally got a couple of days off. For your reasons, you’ve decided that you are ready to sell your business. Now what?

The First Decision Drives the Rest

Before you embark on making sure your business is saleable for a premium and courting a buyer, evaluate if this is what you really want and for the right reasons. Sure, after you sell, you can start another company or just sit on the beach. The key is to decide if you still want to be a business owner or not.

I’ve seen owners who grew frustrated because they had unexpected employee turnover so they decided to sell. Some were aging and just didn’t want to put in the grind it takes every day. Others were undercapitalized for the growth and were always chasing cash flow issues. Make sure that you set all the issues aside and determine if they are problems that can be fixed or not. Through my consulting practice, we helped many owners address chronic or acute organizational illnesses to put their business on the right track again. They started becoming more profitable and fun, so it made the future of the business look quite different.

A Business Can Steal Your Identity

Starting and then operating a business creates an identity. This becomes part of who you are. Everywhere you go, this persona carries with you. When you have this identity for many years, it’s hard to reconcile when you don’t have it anymore. Many business owners who sell find out afterward that it was a mistake. Really dig into what you are going to do with your creative spirit and energy after you sell.

Once you’ve thought through the idea and talked it over with trusted advisors or family, then making this first decision starts a chain reaction of more decisions and actions you’ll need to take. The first decision is a big one. Make sure you’ll be happy when it’s all over. It’s a journey, my friend.

Valuation of Your Business Tells a Story

One of the first steps is to have a valuation completed on the business. Depending on the size and scale of the business, this valuation could be a one-page report or as complex as a 65-page report. The key is to get a valuation that properly represents your kind of business from a qualified and trusted source. Without it you’ll have wishful thinking.

You will soon be hearing all kinds of new terms to describe how your business has been valued. All these terms have basic descriptions as well as strategic implications on your financial position. Why is this important? You need to fully understand your potential final cash position and all the tax ramifications when you are making decisions. There are certain conditions where selling now might not be your best option.

Becoming a Conductor to Lead the Orchestra

As part of your preparation, review all your contracts and leases. Make sure you know your position in each of them and make a running list so you have it at a glance. Some may not be transferable or allowed to be reassigned without negotiation. Property leases, for example, sometimes have various clauses for “early out” agreements. You don’t want to be held hostage by a landlord who’s seeking to gain an advantage. If you have a main supplier, review your contracts in-depth or speak to a knowledgeable industry-specific specialist to get advice. You want to know what you own and can sell.

Once you start negotiating and moving into the closing sequence, you’ll need to be orchestrating these different parties for various reasons. Everyone will want something from you, and you still have a business to run. You’ll fast learn that each of these has specific requirements that you or the buyer and sometimes both have to comply with.

Remember that you are in control. It might not feel like it because everyone will be pulling at you. Be clear with your responses and the time you will reply. Give yourself some leeway for interruptions because there will be some. Maintain creditability by always delivering what you say you will do.

Your advisors are in place to help you. They are there to provide guidance and input, but you still have to make the final decisions. As problems occur, be creative with the solutions. Selling a business or buying one is rarely a textbook flow.

In closing….

Knowing all the answers to these scenarios give you time to operate the business while making it saleable. Once discussions start with a buyer, having the first decisions made creates immediate clout and can speed up the closing.