When you decide to retire or move on and sell your business, you should follow some very simple rules
- do not advertise your company for sale – for example, do not let your competitors know your business is for sale. They will use this to their advantage to tell your customers that you are going out of business in an attempt to steal your existing business. If you lose customers prior to the sale of your business, that could have an impact on the value of your business if the competitor took a large customer. If you advertise your business for sale such as on The Business Place you should never identify your company name, be very general in your description of your business so that your competitors will not be able to readily identity your business is for sale
- do not tell your customers you are thinking of selling the business. They may question why and if you are going to retire or they may think that the company is in financial difficulty, should they start to look for someone more stable that will be able to service their account?
- do not tell your staff that you are for sale, if you have senior staff who are invaluable to the business, you may want to talk to them however you should not talk with junior staff because they may become worried about their job and may start to look elsewhere for employment to ensure that they will not join the unemployed. In these cases, you may be left with no one to do the work
- do not change the way that you are treating and paying your suppliers and running your business. Even if your business is for sale, you should run it like you ran your business for the last few years. If you are taking a different approach, internal and external people may start wondering why are you are acting differently.
- remember, the value of your business does not change because you had one good month of sales, if you are trying to make last minute changes, that probably will have little impact on the value of your business, it is the long term changes that you made prior to listing your company for sale will have the impact on the value of your business – see prior blog articles on planning your retirement
- if you are planning to sell your business and your lease comes up for renewal, do not sign a long term lease commitment, the new buyer may not want your facility therefore it will be very costly to break your lease, if that is possible. As a result, that long term obligation could have a very significant negative impact on the selling price of your business