For many, owning a business is a dream come true. However, the day may soon arrive when you decide that it is in your best interests to sell the company. This is where the advice of Douglas Greenberg will come into play. As a fiduciary at Pacific Northwest Advisory, Greenberg has worked alongside a wide range of business owners and managers.
This gives him a unique perspective on the buying and selling of businesses. Since he has helped a plethora of different companies prepare for their transaction, he knows the ins and outs of this process better than most. Let’s take a closer look at Douglas Greenberg’s three most important things to watch out for when selling your business:
Paperwork and Documentation
“First, you’re going to want to gather paperwork and get your business documentation ready. If possible, it’s often smart to establish long-term contracts with your profitable, stable clients as this could make your business more attractive for potential buyers,” says Greenberg. “Then, you need to get your financial statements in order. Double-check them, and make sure everything is correct. Prospective buyers will probably spend a lot of time pouring over your finances.”
As soon as the basic preparation process has been completed, it is time to codify your current business strategy. This is a key aspect for any potential buyer. Greenberg preaches the importance of developing the proper strategy during the early stages of the process. The companies that take the time to do this are paving the way for more lucrative sales in the future. The strategic plan can also add to the sales price as it shows the depth of the business thought process combined with the future business opportunities.
“You should put together a concrete strategic plan for your business,” Greenberg continues. “You want to show buyers that there is already a plan they can enact right now to increase sales and enter new markets. Also, do market research and identify new lucrative opportunities for your business’s products and services. Many buyers will put together their own strategy, but you might help them see things they don’t currently see.”
Preparing Company Leadership
“Identify your best on-staff leaders and prep them for the sale and for life after you exit,” Douglas Greenberg shares. “This will help ensure a smooth transition.” Once it comes time to exit the company for good, the current employees on staff and those who are acquiring the company need to know that it is in the best possible hands. The new leadership team needs to be ready to step in and take over as well. Otherwise, the transition process may not go as easily as it could.
Speak With Multiple Buyers
This aspect makes perfect sense as well. The more competition that you are able to encourage among potential buyers, the better. A bidding war is always best in these instances. You do not have to be an experienced business owner to see the benefit of this strategy. Don’t make the mistake of putting all of your eggs in one basket by speaking solely with one buyer. The more companies and parties that bid on your business, the higher the sales price will be.
It is best to start the search for a buyer from within your industry circle. Finding another industry participant that may want to expand geographically, or that might want to add an additional line of business may be a great way to find a buyer. If that approach doesn’t connect the business owner with a buyer, then visiting with a business broker or mid tier investment bank might be the next step.
Douglas Greenberg manages the process of selling a privately held business for business owners. Working closely with the business owner(s) to develop a plan that includes a range of potential sales price allows the owner to understand the outcome of a potential transaction prior to the transaction. By following this time tested process, the business owner can go through the sales process with less trepidation as they have a sense of the parameters of a sale and how that sale translates into their proceeds.