How to Sell Your Business, page 1

Introduction

For most people, selling a business is not something they do very often. You can put tremendous effort, and years of your life, into creating a business, but you will only sell it once. At the same time, the decision to sell a business is one with enormous financial implications—and a huge range of potential results. The difference between doing a good job of selling your business and doing it poorly can make you more money than all the years of effort you may have put into your business.

What makes this process even more fraught with difficulty is that you will likely sit on the opposite side of the table from buyers who have bought many businesses. Although not always true, it is common for business sellers to have little experience selling businesses while business buyers may be professionals who have bought many businesses (this is certainly the case for financial buyers, as discussed later in this article). In this context, it is also interesting to note that there are statistically many more would-be business buyers than businesses for sale (of course, not all these would-be buyers are qualified and prepared to consummate deals).

The purpose of this article is to level the playing field as much as possible. After reading it, you will be far more educated than many business sellers. In addition, you will have at your fingertips a roadmap of the process of selling a business. Topics covered in this roadmap include:

• Reasons for selling (and understanding if you really do want to sell your business)

• The difference between financial and strategic sales

• Dressing a business for sale

• Identifying potential buyers

• Working with intermediaries such as business brokers and investment bankers

• Working with professionals such as lawyers and accountants to consummate your sale

• How to negotiate the best possible sales contract

• Managing the due diligence process

Perhaps you’ve looked at one of the books in print that describe selling a business. Many of these books provide valuable information, but none of them will give you this kind of succinct roadmap. In addition, the books are aimed at the owners of “brick and mortar” businesses. They do not tell you how to go about selling a business that is based on technology. To fill this void, this article places special emphasis on the process of selling technology-based businesses.

Continued next page

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