Considering Selling Your Business? Four Questions to Ask Yourself First

For most owners, their business is a huge part of their life. They have put their blood, sweat, and tears into making the company work. They are passionate about what they do and will go to extensive lengths to ensure that their business succeeds.

Si it comes as no surprise that when it’s time to move on from the company (whether for retirement, health, or financial reasons), the separation process can be difficult. Here are questions you should ask yourself before you start the sales process.

Why are you selling?

For some, the answer to this question is easy—it is simply time to move on. However, if your reason is that you vaguely want to pursue something else, you may need to think twice. Is the “something else” worth risking the viability of your current business? Are you just excited about new possibilities and potentially jumping the gun? Maybe you’re just bored. But whatever, remember that the devil you know might be better than the devil you don’t know.

Is the business ready to sell?

Ideally, you have at least two years of preparation before putting your company on the market. That process should include looking at your business the way a buyer would. Go to www.tnvalleygroup.com/knowyourvalue and take a brief test to see how a buyer would look at your business, and from that, you know what your scope of work needs to be during that two year preparation period.

How should my business be valued?

Valuing a business is not a complicated process. An experienced M&A advisor knows the key questions to ask and can give you rather quick feedback on how the market will perceive your business.  Be wary of the broker who tells you what you want to hear, though. About 70% of the businesses presently on the market will not sell, and that is because they go to market overvalued. That represents a lot of lost energy and lost time.  

Can my business survive without me?

Some businesses, particularly those in the service industry, cannot function without their owners. That means that the company will not be worth much without you. Ideally, you should wait until the business is large enough to be viable without you before you sell. Otherwise, it will not be worth nearly as much to someone else.

It is a good idea to get dependable help with the selling process if you are considering making that jump. The Tennessee Valley Group, Inc. can assist you with this process from start to finish. Call 615-390-9966 for more information.

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Tennessee Valley Group

Jim Cumbee established Tennessee Valley Group to help business owners fulfill their dreams for life after business ownership. It’s a mission that his 30+ year career history had prepared him well for—in addition to being an attorney, transition mediator and business broker, Jim has been a buyer, seller, and entrepreneur. His broad range of experience gives him unique insight into how business buyers and sellers can achieve their goals.

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