https://alejandrocremades.com/how-to-sell-your-startup-company/


https://alejandrocremades.com/how-to-sell-your-startup-company/

How To Know When To Sell Your Business

Finances are a critical aspect of any business. Note
that making more money is often the greatest desire
for your investors, if not the founding business
owners. Knowing that you can sell your business at
a maximum price point will help you realize your
business's full value.

First off, you must identify your needs and the
reason for your exit. This will help you sell your
business at a price that will suit all your needs. You
have to work hard to keep your business on the high
to sell it well. A valuable company is a worthwhile investment for potential buyers.

If your business has a significant market share, competitors and other potential buyers will be
interested in purchasing to enhance their market share and presence. Note that the money you will
achieve from the sale varies depending on the potential buyers' circumstances and the deal structure.

A business experiencing a decline in profits may not be of great interest to potential buyers. At least,
many of them will be willing to pay less because of this. So, it helps to drive your business to a stronger
financial position before you even think of selling it. Doing so will enable you to negotiate a higher sale
price and ensure that the new owner propels the success of your business in the future. A revival of
your business will increase its value and reputation, enabling you to negotiate from a stronger
negotiating position.

How Prepared Are You?

The success of selling your business sits on your shoulders. What are your expectations? Do you have
all it takes to endure the stressful process? You have to take a step back and reflect on your decision
to sell your business.

Are you sure you want to sell your business? Does it excite you? Do you find the excitement of going
to work every day amidst the reeling challenges? Do you feel motivated running your business? Or are
burnout and fatigue suddenly catching up with you? If coupled with the thoughts of running your
business for the next 10 or 20 years make it even worse, you've probably lost your interest. Low spirits
and a lack of motivation may indicate that you don't want to continue running the business, and it's the
best time to exit.

Despite the burnout, you have to spare some energy for negotiations and communication with potential
buyers. All while performing everyday tasks for some months before completing a sale. Remember that
you have to sell your company when it's still riding high. So there's no chance of disengaging yourself
from the business during ongoing negotiations to sell it. Also, depending on the sale's terms, you may
have to stay involved for some time, even after completing the sale. Both to ensure an effective
transition and receive any earnout and performance related proceeds.

What are your long-term goals? You should have a clear outline of your next move after making the
sale. Whatever you plan to do, you must ensure that your decision is based on your long-term personal
objectives and determine whether the sale can suit your goals.

It's one of the difficult decisions for business owners to make. A straightforward piece of advice: Doing
it alone can be a daunting task. A team can save you time, money and prevent frustrations in the
process. Having an adept team of financial, legal, and deal making professionals will help you develop
a strategy to help you overcome unforeseen challenges and optimize the transaction. They will help
you to negotiate the best value for your business, so you can focus on operating your business during
the process.

Loss of Interest

Losing interest is a common situation among many business owners. You're often motivated to run
your business during the initial stages to set it up for greatness as a business owner. However, after
years of hard work building your company, you find that operating your business on a daily basis
becomes a grind, resulting in the loss of appeal. It's normal to feel like that, but also a tricky situation
for any business owner. What happens next? You lose the passion and motivation to keep your
business on track. It, therefore, becomes challenging to commit your effort to solve any business-
related issues, inject more resources, and balance your financial books. Even worse, it may spell doom
for your business, resulting in the inevitable—poor decision-making and low standards.

As a skilled business owner, it's essential to recognize and note these signs to avoid many challenges.
At this point, you have to consider selling your business before you start falling. Failure to do so will
affect the reputation and value of your company among potential buyers.

The Decline of Resources

Even if your passion for your business is still strong, you may feel limited by resources. Letting go of
your personal preferences becomes necessary when your company's resources begin to decline
because of uncontrollable situations. You may have excellent business concepts and ideas to the
extent market leaders start to contact you showing an interest to purchase. Don’t ignore them.

A great idea without the necessary input and resources is dead on inception. It may be a difficult
decision to make, especially when you take a trip down memory lane to track your hard work and
business progress. But when people come knocking on your door with plenty of resources to invest,
you've got to consider selling the business to realize its vast potential. You may realize that selling is
the best decision for your business's long-term survival and success.


https://alejandrocremades.com/

The Need To Change Ownership

Regardless of the passion for, or the personal feelings attached to your company, you have to carry out
an objective self-assessment to check your own contribution to the company. If your contributions are
falling short of what is needed to realize the full potential here, then you should consider a sale. You
can keep growing your skills and leadership abilities. As companies grow they need different skill sets
and experience leading from the top. If you can’t hire these people, or bring them in as equity partners,
your goals for the company may be best executed by a new owner.

As much as it's a hard pill to swallow, your exceptional skills used to build the company from scratch
have to undergo a thorough re-assessment. Remember that you built your business from scratch. You
can do it again.

You may either choose to sell and merge with a company that can take it to the next level, and continue
to be a part of that. Or you can go back and build something new out of nothing.

Your Business Is Optimized For A Buyer

As we mentioned above, positioning for a sale from a stronger financial position will enable you to sell
it at a higher price and on preferable terms.

Anything you can do to reduce risk, and optimize the upside for them can make a big difference. The
timing is a big part of this.

If you're looking to sell your business, it's necessary to look at the following factors:

Risk spread: Risk management is a top consideration for anyone who wants to sell their
business or buy one. The best way to do this is to diversify your customers instead of relying
on a few high-value clients. Do you have well protected IP? Are your legal and accounting
records clean and organized?

Future growth and investment potential: If you assess your business and find that it has
enormous future potential and can grow significantly with the right business leader, you should
consider selling it. Painting the right vision with your presentation can add a lot of value for
those seeking to grow their own companies.

Keeping this in mind will help you negotiate with potential buyers from a stronger financial position that
will enable you to achieve the maximum price and optimal terms. You've worked hard already, so make
sure to put in the effort to carry it across the finish line, and realize the full value of your business.

Seek Professional Advice

It can be pretty stressful to sell your business on your own. Valuation, identifying trends, conveying
your financial position, and preparation can be a lot for one person. Fortunately, there are skilled
professionals to whom you can reach out for advice to solidify your decision to sell your business.
These individuals will help you to find the perfect time to sell your business, and guide you through it.

Conclusion

There is no perfect time to sell a business for all. There are many dynamic changes in business, making
it difficult to spot the right time to execute a sale. However, paying attention to the above essential tips
and relying on professional advice can help you find the right time to sell your business. Don’t pass up
on opportunities when they arise. You never know what is going to happen if you try to hold out too
long.

Author Bio



Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a
foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was
named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way
of raising money for entrepreneurs.

Most recently, Alejandro built and exited CoFoundersLab which is one of the largest communities of
founders online.

Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding where he was involved in
one of the biggest investment arbitration cases in history ($113 billion at stake).

Alejandro is an active speaker and has given guest lectures at the Wharton School of Business,
Columbia Business School, and NYU Stern School of Business.