27/05/2020

Selling business: how to do it and who to turn to 100%

In a particularly critical economic scenario such as the current one, especially in Italy, knowing how to sell business is extremely useful, especially for those who, realizing the decrease in profits in recent times, the time has come to follow other paths or run back to other dreams.

Knowing who to turn to, so that the sale of your commercial activity is as quick as possible, is very useful, so that the operations can be carried out in the best possible way.

So here are some useful tips for the case.

Who to turn to when selling your business?

There are companies that have their core business in the buying and selling of companies: in principle, they are merchant banks and financial advisors. The important thing is to know how to choose and, unfortunately, many entrepreneurs, when selling their business, do not do so and make the most classic of mistakes: to avoid spending money, they turn to the wrong interlocutor.

This must not be taken under any circumstances, otherwise there is a serious risk of wasting time. Contact a professional, widely specialized on how to sell business is the wisest decision you can make in this case: only those who actually know how to get the most out of the sale of a company, those who know perfectly this market in constant evolution and the main competitors active in the sector, can lead you without particular pity to the conclusion of the operations that will lead your company to the sale.

On the other hand, we do not improvise professionals in this field: the detailed knowledge of the various clauses, the many tricks and secrets that lead to the sale of a company are essential requirements to be able to operate at their best. And it is only to these professionals that you need to turn to. It is necessary to know how to delegate, so that the business of the company continues in this period of time allocated to the transfer, so that the enterprise value does not decrease.

In short, what does it take to sell a small business?

Even in the case of an SME, sales operations are anything but simple. In addition, it takes as long as it takes for the transactions to be completed. First of all, even for start-ups, micro-enterprises, businesses with less than 10 employees, there are many people involved in the sale operations. One only has to think of the financial advisor, accountants, lawyers, lender banks and all the relevant consultants (labour consultant, real estate consultant, environmental consultant and HR consultant).

Paradoxically, most of the time it happens that the smaller a business is, the more difficult it is to sell. The main reason for this is that the entrepreneur, father, owner and founder of the company, who is now on the verge of crisis, has to face a whole series of obstacles. The most frequent have to do with the loans obtained by the partners and not yet paid, with the presence of relatives working in the company and with the excessive remuneration demanded by the consultants.

Is it worth selling a business, even in the face of a severe crisis?

There is no clear and precise answer to the following question. It depends, then. There are many factors at stake. It is true that, especially in our country, the sale of a business is seen in emotional terms as a rather complex thing, because the entrepreneur separates himself from his creature. However, in the face of closing the balance sheet in red, selling is not only the right choice, but if the transactions are concluded in a sensible manner, the negotiation proves to be a winner to all intents and purposes. Whoever sells his business, then has time to take a break, to think of new ideas, to redesign his life from scratch and so on.

To sell a company, it is not necessary that it is in crisis.

It is not necessarily the case that selling business is only necessary in the face of an economic crisis. Many people leave because they want to change their lives or because they have no heirs or because their children want to do something else.

Just to give an example, in 2010, Dean Hoyle, co-founder of Card Factory, a renowned British company, active since 1997, sold for over £400 million. Today, Card Factory is listed on the stock exchange and is worth over a billion dollars. To journalists who asked him if he regretted having sold so cheaply, Dean Hoyle always replied that there are no things you can’t do with £400 million. Basically, even if it’s in the black, knowing everything about selling business is a very useful thing to do, especially to change your life and enjoy the more free time you have.

Sale of commercial activities: become the perfect strategist

It is true that it is a wise choice to turn to business professionals. However, the entrepreneur eager to speed up the practice and minimize losses, can not help but follow all operations from start to finish. Let’s start from the assumption that avoiding mix-ups is essential in order not to compromise one’s credibility in the business world.

It is therefore obligatory to draw up a document, known as the information memorandum, whose basic mission is to present your company in the best possible way: in this way, potential buyers will have a clearer overview of the sector in which they can dive and the real potential of the new business. How many new entrepreneurs, in this regard, accept new challenges even though they are not in the industry?

Among the mistakes that must be avoided on how to sell business, they stand out:

1. Making the potential buyer believe that if the company has worked, the credit is all on those who ran it.

The buyer, from this point of view, must believe the exact opposite, i.e. that the competitive advantage of the business for which he has a serious interest, in reality depends on the know-how of the employees, the potential of the business, the growing trends, the possibilities to address specific targets and the possibility to contact new emerging niches of consumers. In short, even without the old management, the company can move forward.

2. Do not highlight the growth potential of the business

If there is no possibility of development, who would invest in your business?

3. Employees reluctant to change

Knowing how to innovate is essential today in order to compete. In Italy, you know, employees are rather reluctant to change. This is an obstacle that must be overcome, encouraging the team to believe in the change of program. The change must be planned in detail, so that it can be tackled in the best possible way.

4. Undervaluing the company, generating less and less profit

Aiming at cost containment, increased revenue and role reorganization is a useful way to avoid devaluing the company you are going to sell. Otherwise, you will have everything to lose and nothing to gain.

5. Invest wisely

Whether it is software, research and development, knowing how to invest is essential to compete at best. Surrendering moorings, presenting archaic management, limiting expenses in development and research will result in the lowering of the value of your company, in the face of an imminent sale. Ergo, continue to invest wisely.

If you make even one of these mistakes, you run the serious risk of seeing any hope of selling off your business.

Conclusions

On this webpage you will find all the relevant tips. Result? Reliability and optimization of the timing of the sale of your business, as no one will be able to offer you.

Leave a Reply

Your email address will not be published. Required fields are marked *