Few decisions are as difficult as selling a business, especially a family business. It doesn’t matter if you’re selling at a loss or for profit, there are probably more hang-ups involved here than quitting a job or moving to a new home.
However, there’s no reason to fret. Keep in mind this is a practical move. This can help in holding emotions at bay. The process is easy enough, but how do you facilitate the sale of a family-run business?
Here are five strategies to help you navigate this, from preparation to closing when selling a business:
Step # 1: Talk it out with your team
Selling a business your family owns is unique because some employees are likely close friends and relatives. Have you tried telling family you’ll have to let them go because the business is to be acquired? Be prepared to deal with frustration, disappointment, and a lot of questions before the meeting is through.
It’s best if you talk with them way ahead of the sale. This provides time to process the news. Listening is one thing you’re supposed to do during the meeting. Let everyone air their side, compose yourself and respond if you have to.
Step # 2: Have a disinterested party conduct the business valuation
Running a family business for many years can skew your perception of value. Often the asset’s sentimental value is mistaken for practical value. Hiring service to conduct the appraisal is a crucial step. You’ll have a realistic estimate that’s competitive with the benchmark price.
A disinterested party prevents you from overestimating the value when selling a business. On the flipside, you might also realize the business is worth far more than what you initially thought.
Step # 3: Draft a short list of negotiable and non-negotiable terms
It helps to have this list handy! Are you good with selling everything including the kitchen sink? Which fixtures or equipment would you hold back to keep a fair deal in a compromise? How much are you really willing to settle for, when push comes to shove?
You need to deal with the hard questions now so you’re unfazed later on. Keep in mind there are many negotiable options in selling a business. Price is but one of them. Anticipate curve ball offers, and have contingent counters in mind. If an offer is too low, for example, you might want to keep equipment and furniture to compensate.
Step # 4: Timing is crucial
The waiting game is on, and you have to know when to hold or fold. The rule of thumb in getting a good price is: sell when a buyer is ready to buy, not when you’re ready to sell. This sounds counterintuitive, yes, but remember buyers are out to score deals. Your willingness to score the deal can be perceived as desperation, and no bargain is off-limits to the desperate.
If you’ve been planning to sell the business for quite a while, don’t wait for the last moment before you make a move. Keep watch on the market. Scout for potential buyers. Don’t hesitate if you find one with an offer you like, because you never know when a sweeter deal comes along.
Step # 5: Hire someone to do your legwork
While selling a business owned by your family is doable on your own, there’s no doubt it’s easier if you have experts calling the shots. If you’re keen on going gung-ho, remember the buyer might hire experts his side to negotiate. It’s best you’re represented to ensure the deal ends up fair and in your favour.
Buyers will woo you to sell their way, which is good because you’re in demand. Having an ally who can help you sort out the riffraff is always an advantage. You never really know what buyers are hiding under their sleeves.
Selling a Business? Let Us Help
Square your shoulders and keep a game face on – you have assets to sell! Selling a family-run business takes an emotional toll, no matter how smooth the process is, or how much you’ll gain from the sale. This is why hiring an expert is all the more important. You’ll have an advocate on your side who can showcase your business for sale to potential buyers.
For $299 and not a penny more, zerocommission.com.au will list your business for sale online, keeping it in the radar of serious buyers in Australia. Your listing will stay online until your family finds a buyer for your business. Learn more by clicking here and sell a small business today!
Serious about selling your business? You’ll love these other blog posts:
- 5 pitfalls to avoid when selling a small business
- 7 magic words to use in a For Sale by Owner listing
- 5 ideas to ramp up your marketing campaign when selling a business
- Sell a business using social media: 5 effective tips
- 4 common tips to avoid when selling a business in Australia