7 Actionable Tips For Selling A Business In 60 Days Or Less
While selling your business shouldn’t be the reason why you start a company, you should build a company that can be sold if necessary. Your business will become more efficient by making some changes needed to get it ready for sale.
Many people wonder why they should sell a business if it is profitable or successful. There are many answers that go into it, but I’ll share a personal experience with you guys. When I launched StatFuse, I had no intention of selling the business. In fact, I thought I’d be working on changing the educational world for the next 10 years with this company.
However as time went by, I realized that there were certain hurdles that we were struggling to overcome within the business. We had a glorified plan of what we wanted to accomplish, but getting there wasn’t easy. We didn’t have the experience or the connections to make it happen in education. Thus, it was time to sell the business to someone who did have the resources to make it possible. When it comes to selling a business, there are tons of different things that can justify a sale.
Here are 7 actionable tips for selling a business in 60 days or less:
1. Become A Planning Geek
If you want to sell your business, it is best to have an exit strategy. Most investors and business plans require you to create an exit strategy for the business from the early days of inception. It is key that you outline the goals of the business, list your firm’s assets, give a brief description of your compensation plan to reward your key team members and have an overall understanding of how you want this transaction to work.
The more prepared you are before you actually seek to sell the business, the faster you’ll be able to get a deal done. Create a really solid plan for how the transition between the older ownership team and the new ownership team will work and share details on how you want to be involved in the business in the future. These are all extremely crucial factors that will determine the value of your business.
2. Get Your Business Buzzing
If you want to sell your business, you need to first get as much attention and hype towards it as you possibly can. Create a marketing campaign or something that glorifies your business and outlines how successful it is. When I had made the decision to sell StatFuse, we did this by launching a massive PR campaign.
We started getting featured on various tech blogs primarily because we knew people who would understand our business were reading about it. Find a way to get your business in the spotlight where potential buyers might see you. If you don’t find your buyer just by doing this, it’s still great because you can showcase your buzz to other buyers you find down the line.
3. Create A Short & Sweet Pitch
Any potential buyer is going to ask for information about your business. It can get extremely tiring taking hundreds of phone calls only to find yourself without a buyer. Instead, create a short and sweet pitch deck that outlines the most common questions that others will have.
For example, people will probably want to the following things about a business if they’re going to be remotely interested in purchasing it:
- Yearly Revenue Numbers
- Yearly Profit Numbers
- Who, What, Why, When (Inception of Business)
- Year To Year Growth Numbers
- The Team
- What Exactly Is Included In The Purchase
- Anything Else Noteworthy
Once you create a pitch deck that answers all these questions, instead of spending hours explaining your business to each potential buyer, you can email them a pitch deck. After they review the pitch deck, they can give you a call with any questions. This reduced the time we spent on the phone by almost 75%!
4. Seek Help From Brokers
Note: Brokers should only make money if they sell your company only. The normal rate that I have seen in the market has been $10,000 or 10% (whichever is greater) as their fee for finding you a buyer. Brokers are a great place to start if you don’t know how to sell your business.
They’ll do the majority of the prospecting, chatting and research as they find you pre-qualified buyers. The key to finding success with a broker is finding a broker that has contacts in the same industry as your business. If you’re trying to sell an online business to a retail broker, you’re not going to get very many prospects out of it.
5. Reach Out To Competitors
People called me crazy when I began reaching out to my competitors to buy StatFuse. However, when I sold my first company which was a multimedia agency, I did the exact same thing. Now you’re probably wondering, why the heck would a competitor want to buy your business?
Think about it. If you can sell your competitors on two things, you’re in a really good spot. First, you tell your competitors by them buying you out, they’re limiting the competition and they have one less person to worry about in the marketplace. Second, if you have a competitive advantage that has set you ahead of the competition to begin with, pitch that to them and show them how acquiring you will make them more successful. Never hesitate to reach out to your competition to see how you can swing a deal!
6. Be Open-Minded
Over the years, I’ve gone through the process of selling a business a few times. I’ll be honest with you, it’s not always easy dealing with others who want to purchase your company. However, the one thing that I’ve learned from my experiences is to always keep an open mind.
By keeping an open mind, I mean that you’re going to get offered interesting deals. Most people go in with the mindset that they want 100% of their deal to be worth cash. I used to be like that too, but by not keeping an open mind I lost out on a lot. The first company I ended up selling, the buyer was offering me stock in his existing along with cash. I declined it, but if I had taken the stock, it would have been worth 250% more than what I got in cash. I would just have to wait a couple years to reap the bonus. Keep an open mind and hear everyones offer out because you’ll be surprised with what you get.
7. Minimize Surprises
Deals fall through because big surprises come from the buyer or seller sides. As the seller, you want to make sure that your entire purchase plan is extremely rock-solid so nothing falls out last minute. One of the biggest surprises usually comes in the form of accounting. If your books aren’t crystal clear or well-done, you’re going to have a tough time selling your business.
I highly recommend hiring a professional accountant who can clear up your books and make sure everything is audited before the buyers team comes in and looks at it. All in all, you want to be transparent and honest about everything. Don’t hide things or create lies hoping that you’ll be able to get away with it. More often than not, you won’t and you’ll be stuck not selling your business.
If you want to sell your business, you should have a strong plan prepared ahead of time. In this post, I shared with you 7 actionable tips for selling a business in 60 days or less.