1) Educate yourself — Spend some time researching how to sell (you’re doing that now!) and figure out if you need to make any changes to get your business ready for the process. Common actions include adding business processes to make the business scalable, adding features that would open up a new market, or filing patents to lock down intellectual property.
2) Get organized — Do your due diligence by organizing your bookkeeping and financials and getting ahead of anything that could slow down the sale (such as signoff from other shareholders or active lawsuits or legal proceedings). Write a business memorandum: the company’s history, overview, and successes (highlight wins such as high talent retention or pivoting amid the pandemic).
Also consider your business’s employee contracts, intellectual property issues, and federal and state tax requirements. To ensure you have time to fix all potential red flags, hire a third-party accounting firm to audit your financial statements a year or two before the sale.
3) Get a preliminary business valuation — Turn to experts (e.g., business brokers, merger and acquisition advisers) to understand how much your company is worth, then consider if you’re willing to accept that price.
4) Identify who should be your buyer — Find the why when thinking of your ideal fit. For example: Does the buyer have the cash to buy, or do they need financing? Have they bought companies before? Who would need to approve the deal on the buyer’s end (internally: founders, board members, management; externally: investors, banks)? Will they keep your team employed after the sale?
5) Assemble your team — Putting together a team early can prevent a lot of stumbling down the road. we at Hesset Africa can help with the process include:
- Corporate finance attorney
- Business broker
- M&A adviser
- Personal tax accountant
- Company auditor
- Sell-side bankers
6) Go to market — For small businesses, owners can list their companies anonymously on business broker sites. For larger ventures, owners should identify potential suitors by looking at direct rivals and companies in related industries.
7) Follow the deal to close — Deals can fall through days before closing; stay on top of it along the way by responding to requests within 24 hours, scheduling weekly calls with advisers, and pushing legal counsel to move documents forward quickly.
A tip: Time is your enemy. Resist any efforts made to push the closing date.
8) Prepare for life after sale — Your business is your baby: You should be hands-on when planning your company’s transition (this includes how the new owner will interact with your employees and customers). But entrepreneurs also need to give thought to life after their exit, from retirement planning and managing sale proceeds to future personal and professional goals.
From Hubspot