Here is the final tip in our 10 do's and don'ts of business selling. We gained these insights from hard-won experience and observing what can happen in the business selling market!
10. DON’T – Choose the wrong advisor to assist you with your sale
Do – Engage an experienced sales team
If you decide you need an advisor to help you with a business sale, then I suggest you choose someone with experience who knows and understands your business, or businesses like yours, and who you feel can represent your business in a professional light with potential purchasers.
Whilst ultimately a business sale is a transaction, working with an advisor in this space is not just a transaction, it’s a partnership.
This is because that advisor will have an interest in your sale and you need to feel confident you can work closely with them as the leader of your sales team.
Here are three key attributes to look for in an advisor:
- Experience – They must be able to provide you with strategic advice, based on their experience, on negotiations, key terms and potential purchasers.
- Project management skills – They need to be good at project managing the delivery of the sale process.
This ‘project manager’ needs to display attention to detail and have an eye on the delivery and your objectives.
Often we see sellers with extended sale processes because there is no one strongly involved as an advisor, project managing and bringing issues to a head in order to resolve a way forward.
That brings us to attribute Number 3… - Communication skills – They must be a strong communicator who is prepared to ask hard questions and thrash out issues.
Often owners selling their own business will prefer not to ask hard questions.
Instead of finding out either the good or bad news – for example, the potential purchaser is not willing to pay the asking price – they will fluff around and the issue will remain unresolved.
So how do you determine if an advisor has these necessary attributes?
I suggest asking for the evidence:
- Ask them for examples of businesses like yours they have sold;
- Ask them for the shapes of the deals they’ve done with these businesses;
- Ask them for an indication of the process they intend to implement to sell your business;
- Ask them about the level of communication and reporting – verbal, written, formal and informal – that will be provided as part of the sale process to keep you abreast of progress; and,
- Ask them for referees you can speak to i.e. business owners they have worked with to sell their businesses.
If you would like advice or support to sell your business, contact the team at JPAbusiness on 02 6360 0360 or 02 9893 1803 for a confidential, obligation-free discussion.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.