You’ve thought about it, perhaps spending some sleepless nights debating what to do next with your New York or New Jersey based business. Now you’ve decided it’s time to sell. You have good reasons for the sale—reasons that shouldn’t scare a prospective buyer. So now comes the fun part—or so you think. You’ll set a price—maybe on the high end—and let your business acumen and gut instincts take you where you want to go.
Not so fast. If this all sounds too good to be true, it’s because it probably is. Savvy negotiation strategies and a diligent process are vital to the successful sale of any business. Here are some items to consider before you go any further.
Gather Your Resources
A Mergers and Acquisitions Advisor located near you in New York or New Jersey is a vital ingredient in the recipe for a successful sale. Your advisor understands the sales and negotiation process, as well as tactics for marketing your business. Before you meet with an M&A Advisor, you’ll need to gather some basic financial information including your tax returns or at least three years Profit and Loss Statements and Balance Sheets.
Be Knowledgeable About the Market
You need a realistic idea of your business’s value. Intelligent pricing is just as important as good financial records. Your M&A Advisor will utilize industry-tested strategies, including histories of similar businesses, into a clear value analysis. They will also look at intangibles to ensure your business is fairly priced. Your advisor will work to help you understand how market forces dictate pricing, and how those forces may change over time. Remember that most buyers won’t wait for an overvalued price to drop. They’ll simply go elsewhere.
Know Your Ideal Buyer
Finding the right buyer is even more important than maximizing your profits with the sale. Your M&A advisor will help you determine the right buyer for your business, by focusing on prospects who are both interested and financially qualified. It’s important to know early on which bargaining chip the buyer brings to the table, as well as how they intend to pay for their purchase.
Your M&A Advisor will access this information, and more. They will also anticipate buyer concerns, and counsel you about how to discuss problems that can make the buyer suspicious and the process adversarial.
In the early stages, when the buyer considers making an offer, the advisor follows up to ensure the negotiations go smoothly. When you work alone, you can lose bargaining effectiveness by trying to do it all yourself. Having someone negotiate on your behalf is a smarter option that bolsters communication and distances you from your emotional connection to the sale.
Strengthen Bargaining Power
The more options you have, the stronger you’ll be in negotiations. Sellers who aren’t desperate are stronger at the negotiation table. As you prepare to sell your business, ensure to keep it running smoothly and profitably as if you were going to be continuing well into the future. You can’t take your foot off the gas during the business sale process as it could definitely impact the ability to maximize your proceeds from the sale. A good M&A firm coordinates the entire business sale process so that you can keep your focus on running your business.
Know the Value of Good Timing
Timing is everything when you sell a business. Every deal has a shelf life, and will go stale if you wait too long. Your advisor keeps the process moving at a reasonable pace to ensure that the deal stays on track. An M&A Advisor helps at every stage of the sales process. They represent you, working toward successful completion of the transaction in a reasonable time frame and at a price and with terms that meet your expectation. The advisor acts as your agent, helping to structure the deal and negotiating for its successful close. That creates a winning deal for all parties involved.