So, it’s (finally) happened. The big breakthrough. The day you thought about when your business was first considered a success! The day you found out that someone was interested in your business; not just interested but actually keen to buy it! Your excitement knows no bounds.
After the initial excitement dies (even if only temporarily) you think, ‘Now what?’. You know your business, you know it inside out. But you’re not in the business of selling businesses. How do you go from where you are (a successful owner of a business that is on the brink of being sold), to where you want to be (a successful ex-owner of a business that has been sold, at a price that reflects your efforts over the years!).
Well first, BREATH! You will hopefully have a following wind from here on. Which is: (i) good; and (ii) a challenge.
Second, make a list. You may wish to start with this one and add/delete as appropriate to you and your business:
- Sign a confidentiality agreement with the potential buyer.
- Engage people you trust, to advise you: on financial & legal matters.
- Take stock: what is being sold? Shares/assets?
- Think about the price and conditions to the sale.
- Consider and seek advice on whether the business needs to be restructured.
- Once you have completed 1-5 above, discuss the fundamental aspects of the sale with the potential buyer; if successful, sign a non-binding term sheet with the potential buyer.
The list above may seem simplistic; but it often pays to keep things simple. The list is aimed at getting you through the initial phase of the sale. Once you have engaged advisors, they should be able to take you through the remaining steps.
From your perspective, the ‘good’ is that you have a real chance to exit the business (which is what you presumably want to do) and the ‘challenge’ is that you need to ensure that you balance your business objectives (of making money and keeping the business going) with your personal objectives (cashing in), and the time that is allocated to each. With a bit of planning and good advice, this is definitely achievable!