You’ve spent decades building a successful business, and now you’re ready to take a step back and pass it on to someone else; someone equally as passionate and determined as you are. But where do you start?
Let’s explore if selling your business is right for you and how to find the right strategic buyer.
Are You Ready to Sell?
First, you must be honest with yourself and decide if selling your business is right. Selling your business is a tremendous decision—it’s been the recipient of your blood, sweat, and tears for most of your life. You may be ready to sell your business if:
- You want a new role within the company
- You’re ready to retire
- You have an interested buyer that would be a tremendous personal and financial fit for your business.
If one or more of these statements resonate, you may be ready to sell your business! Remember to create an exit and transition plan before you make any decision. Skipping this step can spark confusion within the company. By preparing early, you will set your business up to have the highest value and a lasting impact for years.
If you don’t have a buyer in mind and are ready to sell, here are some things you need to know to help you find the right person for the job.
The Importance Of Finding the Right Person
You’ve worked hard to create your business, so you want to sell it to someone who will take good care of it! You want to find someone equally passionate, educated, and innovative as you are to take the organization to the next level.
But here comes the big question: What’s better, the quality of buyers or the quantity of them?
Trick question; it’s both.
You may have 100 or 1,000 interested buyers, but they might not be able to afford the price you’re looking for—so you could spend hours talking to buyers that can’t afford your business. That’s time and money down the drain.
Or, you could have five interested buyers with enough resources to pay what you’re asking for, but they might need to gain the right experience in your industry. Even if they can check all of the other boxes, they’re not the right fit if they don’t have the experience you’re looking for.
Try to find the best of both worlds! But how?
Depending on the amount you’d like to sell your company for, you have different categories of buyers to consider.
The Types of Buyers For Your Small Business
You have options when it comes to choosing a buyer for your business. There are four types of buyers to consider:
- Business Brokers: Just like you’d work with a real estate agent to sell your home, business brokers work to find the right buyer for your business. They have deep knowledge about your organization’s industry and how to best market your business to reach the right buyer quickly.
- Online Marketplaces: Nowadays, everything can be done online, including finding a buyer for your small business. Online listing sites are cost-effective, accessible, and easy to use. It’s just like selling an item on eBay or Facebook Marketplace!
- Family Member: Keeping the business in the family can be very valuable and is deeply important to many small businesses. However, don’t just assume that one of your kids wants to take over the business. Talk to your family to better understand their level of interest to see if this is a viable option for you.
- Internal talent and network of professionals: Often, the best buyer for your business is already working for you or part of your inner circle. Look at your employees and professional connections to determine if someone has the right experience and expertise to fill the role you’re looking for.
Whatever route you take, clearly communicate your decision to everyone involved, including your fellow leaders, employees, and family members.
Create Your Ideal Buyer Avatar
To find the right person, you need to know precisely what you’re looking for in a potential buyer. These are the most valuable resumes you’ll be reviewing, so you’ll want to keep an eye out for several essential items:
- Experience: What type of experience do they have? Do they have years of knowledge and expertise in your organization’s industry?
- Drive and dedication: Are they passionate about what your company does? Do they have innovative ideas for the future?
- Bandwidth: Do they have enough time to dedicate themselves to the growth of the business?
- Skills: Do they possess qualities to help the business grow?
- Style: Not meaning their fashion sense! Based on their management style, do your employees feel they’re a good fit?
Of course, your potential buyer must also have the financial means necessary to make the initial investment and keep the business going.
Your Succession Planning Partner
Selling your business can be equally exciting and emotional, and you want to be sure that your transition out of CEO goes as smoothly as possible. Toberman Wealth provides step-by-step guidance on selling your small business and succession, so you don’t have to do it alone. Get in touch today to learn more about our services.
Craig Toberman is the Founder of Toberman Wealth – a fee-only, fiduciary financial advisor based in St. Louis. He assists families and businesses with strategic financial planning and long-term wealth management. He has over a decade of experience in financial services and has crafted custom financial plans for hundreds of families and businesses.
Craig received a Bachelor of Science (B.S.) degree in Agricultural and Consumer Economics from the University of Illinois and a Master of Business Administration (M.B.A.) degree in Finance from Saint Louis University. He is a Certified Financial Planner (CFP), Chartered Financial Analyst (CFA) charterholder, and Certified Public Accountant (CPA).
Craig is a member of the National Association of Personal Financial Advisors (NAPFA), Fee-Only Network, and XY Planning Network.
Craig lives in the greater St. Louis area with his wife, Ally and son, Hank.