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7 keys to successfully selling your business

3 min read


Entrepreneurs have a variety of goals in mind when they start a business — growing wealth, achieving independence, contributing to society, leaving a legacy and more. What they may not consider, though, is how they will get out of the business when they are done with it.

There are a few ways a business owner can exit, mergers & acquisitions expert Janice Robertson explained at her session at the National Association of Women Business Owners’ Women’s Business Conference in Washington earlier this summer.

Owners can take the company public, form an employee stock ownership plan, bequeath the business to relatives or sell the company in the open marketplace. Whatever they want to do, it’s never too early to start planning for that exit — whether it be next year, in a decade or dozens of years from now, Robertson said.

In the session, Robertson gave an overview of the important steps in the complicated process of the fourth option: selling a business in the open market.

Selling a business, it turns out, is a lot like selling a house — but far more complicated — and you don’t want to do it without help from at least three key professionals:

  • An adviser who specializes in M&A
  • A lawyer with plenty of M&A experience
  • A tax professional

The sales process, which Robertson says typically takes between six months and a year, starts with a valuation of the business. This is similar to the appraisal of a house in that the business is inspected inside and out, and the value is determined based on that information and market conditions.

Robertson outlined the key factors for a successful business sale:

  • Realistic expectations. If you greatly overestimate your business, you will have a hard time negotiating a sale at fair market value.
  • Planning and preparation. Get your business and its finances in order before you try to sell.
  • The buyer’s perspective. Buyers may have different values and expectations than sellers, and you need to try to relate to them.
  • A strategic fit. Does your business — and your goals for it after the sale — fit with the buyer?
  • Your emotions. Especially in a family business, managing your emotions is important. It’s easy to get emotional about selling the business your family worked to build, but allowing your emotions to take over doesn’t help facilitate the sale.
  • Risk and  value. There are risks to you even after the sale is complete. You want to minimize those while maximizing the value of your business.
  • Integrity. Dishonesty can blow up the entire process.

Image credit, messenjah via iStockphoto