Every successful entrepreneur knows that surviving in the tough landscape of business takes a juggler’s dexterity. The trick sometimes is not in catching a ball but in letting it go.
It is not a failure to let go of something that’s not working. It is rather a sign of prudence, resilience and agility to come to the right conclusion before the timing goes awry and things slip off in messy ways. It takes wisdom and courage to accept and adapt when things are not going as expected.
From the Tulip bubble to the Y2K burst to the 2008 meltdown, the world has seen many savvy businessmen locking their stables well in time while others waited too long for the horses to run away.
Smart businessmen are always alert to indications of the not-so-loud warning bell. It can be an impending financial dent, a market domino-effect, a change in the taste and tide of consumers, VCs or the industry, a shift in regulatory stance – but irrespective of the reason, when it is time to fold, it is time to fold.
These reasons may not always be external. One may also decide to hang one’s boots due to other commitments, personal issues, health factors and family. Sometimes an overwhelming sense of monotony or an instinctive call, that some other opportunity may be more right to pursue, could also spur this decision to let a current business walk into the sunset smoothly. Once you are sure that you will head for the exit door, the next and equally-critical question is – How?
Selling Your Small Business – One Step at a time
There is no elevator for going up when it comes to business. Correspondingly, there is no fast-slide to sweep several floors below when one wants to get out. This is a staircase scenario, both ways. So consider and execute every step carefully and thoroughly.
The right timing for the sale
It is imperative to play the clock right, else the gains to be reaped from winding up won’t accrue at all. Being too early or too late is a common mistake. Make sure that you do not give away your product/service portfolio’s stars away in the flea market. Also, there is no point in letting your portfolio’s cash cows wait idly for too long. This is where it would be deft to consult a first-hand industry watcher who can steer you on the timing part in a strategic way.
Prepare the business for sale
Being ready for sale is the commencement point of this exercise. The real legwork follows now. This entails cleaning up financials, sorting proper legal documents, apprising stakeholders as well as employees of the decision and the process etc. Make sure that current commitments and obligations are honoured with professional integrity, and everything operates in a swift but transparent mode. Requisite compliance measures, as well as documentation, have to be addressed efficiently. Seek professional help here if you feel there is too much on your plate to handle.
Get your business evaluated
The sale is not just about the price you are conjuring up. It hinges on a lot of variables; market perception, equity, expected industry trends, goodwill, force-majeure forces along with a visceral assessment and report on the business’s repository of strengths and gaps. You can try out the support, tools and expertise of consultants listed on Tobuz.com at this stage.
Boost your sales and store
Just because a business is being put in a box does not mean it cannot fetch a stellar price. Small efforts like having neat accounts, tapping talent pool’s attractiveness and competitiveness, cleaning up old inventory, having loyal clients put in a strong word, showing transparency and courtesy; or, simply, a new coat of paint can work wonders.
Find a broker
The world has always been inhabited with middle-men to connect two interested parties. Playing match-maker can either be done the conventional, fork-lifted and flaw-ridden way; or it can be done in a new-age way with savvy and prompt consultants that Tobuz can provision in a personalised, service-driven, proven and attentive approach.
Shortlist your buyer
The chances are ripe that if you have done the previous steps right, you are almost nearing the final stretch of footsteps and are staring happily at a pool of prospective buyers. This is where feet/heart can take over the mind. Be cautious of who you pick and why. Let this decision be deliberate and well-shaken keeping in mind your own homework and tick-boxes. Price or whims should never override the significance of future outlook, business flair and intentions that a given buyer manifests for your business. Even if you are saying bye to it now, you still want to make sure that the baton/baby goes into the right hands.
Sign the contract
Paperwork is named so for a reason. Documents need to go through the legal doors and routes before anything is cemented. Take care to address the fine-print, various clauses, considerable clarity on liabilities and get this work carefully vetted by legal experts – like the ones available on Tobuz – for making this process fluid and friction-less without any bolts popping from the blue in your future.
Saying bye to a business is more than assembling and ferrying off some card-boxes. It is about delicately and strongly sealing what once belonged to you – your goals, talent, deliverables, dreams and struggles – and then letting someone else take it over. It is a process laden with difficulties, slip-ups, temptations and fog. Information and pre-emptive work will be your spades and windshields here if you undertake this onerous task with the eye of an eagle and the heart of a parent. Use competent counsel and seasoned foresight to support your decisions and clear away confusion. Be clear about what you want so that you are not stuck looking over your back when you are supposed to leap forth.
Consider regulatory, ethical and professional implications of this process and lean on sound advice wherever and whenever you feel the need for a sharp friend. Do it well. Do it in time. But don’t do it half-baked or haphazard.
Sell smart so that your rear-view mirror looks good. That’s the view you want as you drive away.