Are you getting ready to sell your business, but worry that a buyer may flounder and run the business into the ground as soon as you walk out the door? Is that one of the reasons why you are hesitant to even consider seller financing as a part of the overall sales package?
If you have this concern, it might be worthwhile to take a closer look at your business operations and perhaps make some modifications before you put up the “for sale” sign. How “turnkey” is your business? Does your business depend on you and you alone? Does it have systems in place that allow it to operate? Can you walk away and let someone step in and take over where you left off? If you walk away, will the whole business crater?
If your answer is “yes,” then selling your business – let alone seller financing – may not be for you. Closing your business will be the right solution if you want to do something else and the business will not run on its own. I am not talking about running on its own indefinitely, but if your basic duties are completed by a competent person, then the business should be able to continue operations in your absence. If not, you really don’t have a “business” to sell anyway.
Ensuring that your business is in “turnkey” condition before selling gives you more options and more precautions to protect your investment in a seller’s note. If your business isn’t turnkey and is very dependent on you and your abilities…. Call us today… We can help you prepare your business to sell. We offer a consulting plan that can have you setting on the beach in no time at all. We have years of experience in transition companies from being codependent on their owner to being self sufficient and ready to go out on their own type of companies. But I digress….
Now, I know how an entrepreneur thinks: “It would run without me; just not as well as with me!” Set your ego aside, though, and realize that if we take a closer look, if we have done the job that we are supposed to have done as successful entrepreneurs, we have built a business that is MORE successful with us but can run just fine without us. Yes, that employee will have to figure out where you keep the extra paper clips on their own and how to fix the copy machine, but in the end they will figure it out and the business will still be there a week or two after you are gone.
If you can, at least hesitantly, say “yes”– or at least a slight “maybe so” – then you are on the right track. You see, the reason a business buyer is willing to pay you MORE for your business than what it would cost them to start one on their own is, quite simply, this: you’ve done the hard part for them.
You have already put into place a system that allows you to leave for a day or two without the whole thing blowing up. This is important to you and the buyer. The problem with the fear that “they” will run the business into the ground is the fact that, if this is really true, then you have not built a company that has solid systems in place that allow the company to run on its own – IF the system is truly followed. You see, a buyer wants this assurance of taking over a proven operation. They don’t want to inherit a weak system. They want a time-tested system. They don’t want to inherit your failure; they want to build on your success.
Let’s put the “hat” of a buyer on for just a moment. A buyer want to buy a business that if they came in and simply did a “good job” – not a “great job,” a good job – would be successful. It may not be the next Google or Microsoft, but it would be the business that pays the bills for the next two, three, or five years. All the buyer has to do is a good job at fulfilling what you instructed them to do when you spent your time training them in the new position of owner and you stay close enough to review reports and let them know if things are going too far off-track.
Before you pull the trigger on offering your business for sale, do your homework of ensuring (and preferably documenting) that your company’s systems and procedures can be operated without your watchful eyes 24/7. A skilled business broker can help you review this and make necessary changes before buyers begin to look at your business.