In running your small business, does anything truly keep you awake at night, perhaps actually selling your business?
Whether you’ve been in charge of your business for just a few years or a few decades, there may come a point and time where you decide to call it quits. That could mean going to work for someone else or possibly buying a new business. Heck, you may even be at that point in life where retirement is a valid option.
No matter what the circumstances might be, selling your small business at some point and time is not something to sneeze over.
For starters, you are obviously invested in what kind of price you will get for the business you have formed and cared for all of these years.
Secondly, if you have employees under your wing, you want to do all you can to make sure they have as smooth a transition as possible to their new owner or owners. The last thing you want to do is cause them strife, something that might make some or all of them choose to go elsewhere.
So, now can you see just a couple of reasons as to why those you sell to is important?
Make Background Research a Priority
In order to come up with as good a sale as possible, keep a few pointers in mind:
- Target – First and foremost, what kind of owner or owners do you want to sell to? Some of the areas of interest would include keeping or moving the business out of town, whether or not your employees can stay with the new ownership, and what kind of track record the potential owner or owners have in running small companies. Although it may seem hard to get a true feel for each and every potential owner out there, you could proceed with a background check. Doing so allows you to have a better feel for the individual/s potentially taking over the company. If you are possibly dealing with someone with a checkered financial history, that is a notable red flag right there. You also want to make sure you’re not potentially selling to someone willing to get rid of all the employees that have hopefully been loyal to you over the years (see more below);
- Money – Nothing is done these days (at least most things aren’t) without a financial transaction. Be sure to work hard to get as fair a price as possible for your small business. By checking around to see what comparable businesses are worth, you will feel better about the price you seek. Also specify what is included in the sale in terms of property, supplies etc. If you are selling one business to open up another one, you may decide you want to take some (or all) of the movable property with you (computers, furniture etc.) to avoid buying new.
What Happens to the Employees?
- Employees – Finally, in many instances, the toughest part of selling a small business can be the impact it has on the employees. Unless they are guaranteed position with new ownership, their lives are oftentimes left up in the air. As a small business owner, that can prove a little disconcerting to you. While you are in no way responsible for their financial success once you wash your hands of the business, it is worth your time and effort to try and help them where you can. That can mean either trying to guarantee they go with the new business or providing them as much notice as possible to look for other employment opportunities. Either way, be as honest with them as possible.
Selling your small business oftentimes doesn’t come without a headache or two, but good planning can negate much of the stress.
If you’ve sold a small business or two before, what advice would you give someone in that very same position today?
About the Author: Dave Thomas covers small business topics on the web.