July 25, 2007

Four tips to get the treasure

So you’ve prepared your company and are ready to sell. Here are the steps you’ll need to take next to get to your treasure:

1. Get an objective outside appraisal of your business value before you start. It is surprising how often entrepreneurs overestimate the value of their own business. Not unlike a house or a car we own, sellers have lived with the imperfections so long that they don’t notice them any longer. Rest assured that a new buyer will notice every flaw. Getting an outside opinion before you bring in potential buyers will prepare you for many of the issues that might come up.

2. Build a large group of potential buyers through business brokers, industry conferences and online research. A good rule of thumb to remember: the larger your group of potential buyers, the better the eventual price. But once you have several candidates you’ll need to narrow the field quickly and become loyal to one potential suitor. Trying to barter with two buyers seldom works.

3. Get outside help for the negotiation. Have someone who has been through a sale to consult with, whether it’s a friend, a lawyer or an accountant. Experience is immensely important in the negotiating process, and having someone knowledgeable and seasoned to speak with will be invaluable.

4. Don’t ignore the details, and do keep a sense of humour. Make sure you keep a comprehensive list of all of the issues to be resolved. When the negotiations start in earnest, make sure to keep the atmosphere light, especially at crucial moments. It can be the difference between success and failure.

— Joe John Duran

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