These 3 questions will tell you if you are not ready to sell your company.

chiefoperatingofficer.blog Sunday, Mar 13, 2022 The process of selling a business is complex and multifaceted: It involves working with multiple stakeholders who sometimes have conflicting.. title The process of selling a business is complex and multifaceted: It involves working with multiple stakeholders who sometimes have conflicting priorities. While only you can decide when to sell your business, you also must rely on these other stakeholders in order to have a successful sale. Itҳ your job to make sure their decisions align with your own goals. Why sell your business? Every business owner will have to consider a transition at some point in their career, whether thatҳ upon entering retirement, starting a new business, or even reentering the workforce as an employee. Even if your gut feeling is telling you not to sell your business yet, you might find yourself in circumstances that leave you with few better options. On the other hand, you might be looking for the chance to sell and suddenly sense the timing is right. Regardless, you have to consider a number of factors other than your intuition. You canҴ go with your gut unless youҶe also prepared well for a business sale. In many sales, an owner will already have a specific buyer in mind, and both sides might want the sale to occur נbut weeks, months, or even years pass, and nothing happens. When a would-be seller never takes the time to learn the specifics of how a prospective buyer actually views the company, they donҴ know how to move the sale forward. The perceived complexity of the sale becomes a barrier to action, and for a business owner who isnҴ 100 percent certain that they want to or should sell their company, thatҳ more than enough reason to let a deal fizzle out. Your gut feeling might be telling you to pursue or avoid a sale, but is your gut feeling always right? Take a step back and think objectively about what you want to do. Here are three questions to ask before selling your business. 1. Is the company financially healthy enough to yield a suitable valuation? The value of your business will be at least partially determined by company cash flow. If youҶe decided that you need US$20 million to retire, but your current cash flow doesnҴ warrant that price tag, it could make sense to wait until business picks up before pursuing a deal. Many of the variables youҤ consider when valuing your business׭onthly or annual sales numbers, profit margins, market cap and total addressable market estimates, plus othersסre the same ones you already use to measure your companyҳ financial health. If you think you should (and can) improve in certain areas or you believe your most profitable quarters are just ahead, postpone the sale until you have more leverage to work with. Thereҳ one caveat to that, though: Postponing a sale is not a strategy with long-term viability. 2. Do you understand the buyerҳ key decision drivers? Ideally, when youҲe ready to sell your business, someone will be ready to buy it. Before they do, however, theyҬl want to see relevant company financials, customer data, market summaries, and other important information. All of this information matters, but you should try to ascertain the factors that matter most to a particular buyer. This will help you home in on areas that need improvement and prevent you from optimizing the wrong aspects of your business prior to sale. 3. Do you know what is most important to you in a sale? As you consider whether youҲe ready to sell your business, think about what matters most to you. Is it maximizing your financial return, leaving a legacy, or something else? Will your employeesҠopinions impact your decision? Do you hope to remain involved with the business in some capacity? Identify the outcomes that would be nice to have as well as the ones that are nonnegotiable, and use those to set a baseline for success. A business sale can feel like a marathon. If youҲe going to finish it successfully, you need to train for it נthat means everything from understanding your financials to building relationships with potential buyers. If you can answer what questions to ask yourself, then youҬl be better equipped to get the outcome youҲe looking for. Nick McLean is a founder and partner of Four Pillars Investors, an investment company that purchases and operates middle-market businesses that have an untapped potential for growth. For more insights and inspiration from todayҳ leading entrepreneurs, check out EO on Inc. and more articles from the EO blog. The post If you canҴ answer these 3 questions, youҲe not ready to sell your business appeared first on THE BLOG. חחחחחחח- By: Anne-Wallis Droter Title: If you canҴ answer these 3 questions, youҲe not ready to sell your business Sourced From: blog.eonetwork.org/2022/02/if-you-cant-answer-these-3-questions-youre-not-ready-to-sell-your-business/ Published Date: Wed, 02 Feb 2022 13:45:44 +0000 Did you miss our previous articleŠ https://chiefoperatingofficer.blog/chief-operating-officer/four-ways-performance-reviews-can-be-changed-to-avoid-annual-reviews The postThese 3 questions will tell you if you are not ready to sell your company. appeared first onSMB Place.