Explain Like I’m Five – How to Structure a Complex Deal
Selling a business is not easy. There are many moving parts to consider, each with its own complicated details to manage. Although the sale of every business is different, the basics remain the same.
In this blog, we’ll take you through some well-established steps to help structure a complex deal and close it.
Get a Professional valuation
Valuing your own business is like having your cake and eating it. Most business owners have a natural bias towards their company and tend to overinflate things – after all, their livelihood is attached to it. With that said, you shouldn’t underestimate its value either, as some business owners are prone to do.
Most buyers will look at several things, beyond just the cash flow, before deciding to see if your business is worth buying. This is why it helps to take everything into account from inventories to sales, debts, and other assets to come up with an accurate price and identify opportunities.
Organize Your financials
Savvy buyers will do their due diligence before buying out your business. This means they’ll look at everything from real estate to financials. It is important for you to get them fixed before selling your business.
A few tips to help you get started:
Create a list of equipment that you want to sell along with your company, including intangible assets and intellectual property.
Hire an accountant to review your financial statements and tax returns for up to 5 years.
Make sure to provide your potential buyer with an operating manual to help them run the business.
Make sure that all documents are presented in a way that is useful to your buyers.
Try to Increase Your Sales
Companies that have multiple sources of revenue and health income streams fetch the highest price on the market – but naturally.
This means you should do everything you can to improve the performance of your business to maximize revenue and the value it can provide to buyers. Don’t jump ship when your sales are dwindling because it will hurt your ability to get attractive pricing.
Potential buyers will evaluate your sales figures to determine if your business is viable enough for them to understand. A diverse base of customers, multiple sources of revenue, and a robust team will improve the value of your business.
Find a Third Party Seller
Business brokers like Serdar Kabul provide you with the best way to derive maximum value for your company and find the ideal buyer.
Business brokers can help make the process a lot more simpler, including due diligence for the seller. For obvious reasons, due diligence is one of the most complex parts of the deal and that’s why most deals fall through. A good broker ensures that you stay on track throughout the process so you don’t get distracted from improving your business.
Marketing Your Business to Prospects
A potential buyer for your business can come from various sources, including C Suite executives, industry peers, and private equity firms. Your business can receive interest from these groups. Just make sure to carefully review the buyer before moving on.
Ready to sell your business? Click here to get in touch with Serdar Kabul, the leading authority on selling businesses, for the best results. We utilize actionable strategies to plan confidentiality through every step of the sales process.