You may have asked yourself “how do I sell my business?” but the answers seem nerve-wracking, regardless of where you’re located. However, if you’re in Texas, be prepared for a complex process.
The city’s booming economy, diverse business landscape, and growing population make it an attractive location for buyers, but also means competition can be fierce.
To ensure a successful sale, you need to carefully plan and execute each step of the process. From setting a realistic asking price to finding the right buyer, attention to detail is key.
It’s also important to understand the various factors that can affect the sale, such as market trends, legal and financial considerations, and the current state of your business.
Does it sound too complicated? Don’t worry, you won’t be leaving it to chance. You’re here for a reason and you’re on the right track.
We’re here to help you simplify the process and get the idea about where and how to sell your business in 2023.
What to know before selling your business
Selling a business in Texas can be a complex and emotional process, regardless of whether you’re a seasoned entrepreneur or a first-time seller.
While some people may sell their business as part of a retirement plan, others may be looking to exit a business they’ve built from scratch to pursue new opportunities or challenges.
It could be a result of a plethora of reasons—with some for personal purposes.
Regardless of the reason for the sale, it’s important to remember that every business transaction is unique, and there is always something new to learn.
Thus, there are always key takeaways that differ from the last.
The value of your business
Chances are you’ve already got a ballpark estimate of what it’s worth. However, what you believe your business is worth versus what it’s actually can be quite different.
Negotiating the sales price of a business can be very emotional and frustrating for sellers who have invested lots of time and effort into launching their business.
Properly valuing your business eliminates this uncertainty and enables you to put an accurate price tag on your business.
There are tools such as our free Business Value Assessment that lets you create an initial valuation of your business.
Or if you want to do it yourself, there are four ways to effectively value your business before you sell.
Either way, this is the first step in order to have future conversations.
Make the best deal for both parties
When it comes to selling your business, the ultimate goal is to strike a deal that benefits both you and the buyer.
That means neither of you should feel like you’re being taken for a ride, and both of you should walk away feeling like you got a fair shake.
To make that happen, it’s crucial to keep the lines of communication open and be upfront about your goals from the outset.
Whether it’s securing the highest possible price or ensuring the future success of your business, knowing what you want is key to achieving a successful transaction.
And don’t forget to listen to what the buyer wants too. After all, they’re the ones taking on your business, so it’s important to make sure their needs are met as well.
Learn what you should do and keep yourself level-headed when dealing with buyers interested in your business.
Involvement is still needed post-sale
As a small business owner, you might assume that once the deal is done, you’re done. But, in most business acquisitions, a third party holds a percentage of the proceeds in escrow for some time.
This is one of those common misconceptions about selling a business that many believe is still true to this day.
Involvement post-sale is necessary to make sure that there are no hidden problems that could hurt the business in the future.
If you choose to finance the sale of your business over time, you’re showing that you have faith in its ability to keep generating income in the future.
On the other hand, taking a big lump sum payment may suggest a lack of confidence in the business’s future growth and cash flow.
So, ask yourself: do you believe in your business’s profitability and growth potential for the next five years? If you do, then it makes sense to be patient and finance the sale over time. You could also try equity rollover should you want to invest a bit of your proceeds to your company.
It may require resiliency on your end, but it can save you money on taxes (more on that later) and increase the buyer’s confidence.
Commit to your decision
As a business owner, it’s important to have complete confidence in your decision to sell your business.
To do this, you need to have a clear understanding of what you want and be fully committed to achieving your desired outcome. This level of commitment will help you make decisive actions leading up to the sale.
For instance, it’s crucial to consider your preferred level of involvement in the business after the sale. While many business owners wish to maintain involvement in their companies, it’s not always the case for all firms.
That’s why it’s essential to have an honest conversation with yourself about your goals in the sale process.
If you’re in a loop, follow these tips before selling your business and take your time thinking about it.
Doing so will enable you to manifest your desired outcome more effectively and increase your chances of a successful sale.
Is your business sale-ready?
If you’ve built your business from the ground up, it’s fair to assume you have a lot of pride in it, and that’s reflected in your desire to see it continue to thrive long after you’ve stepped away from it.
But some owners have different ideas of what “stepping away from it” actually looks like. Some assume they can continue running the business indefinitely.
Others look to hand the reins down to family members as a legacy business (whether they want it or not). Regardless of how or when eventually the business will change hands.
If you’re serious about selling, there’s another important question to ask – is your business actually ready to be sold? Making your business sale-ready is an awful lot more than just being profitable – it needs to be predictable for the buyer as well.
What does that mean to you? Well, if you’re looking to sell, there are things you can do to make your business easier to transition and more valuable to sell—such as making a comprehensive succession plan in detail if you have family members that are interested to continue your legacy.
How to prepare for the sale of your business
It’s a big decision that requires careful planning and execution.
You want to make sure that you’re getting the best possible price for your hard work, and that there’s a smooth transaction between you and the buyer.
Moreover, it requires extensive research and analysis on your end.
Mistakes when selling your business can happen so this is necessary.
Prepare historical data
When you sell a business in Austin, you’re going to have to present a number of financial documents.
The potential buyer is essentially going to need to see the entire financial and tax implications of your company.
Documents take time and effort to acquire, but doing so far in advance will prove to be important.
If all of the necessary documents are readily accessible and in one place, the next step would be to improve upon them in preparation for a sale.
This concept is best demonstrated with a real-world example.
Let’s say your business has a potential buyer that specializes in optimizing a sales team in order to spur growth.
This buyer is going to need money to invest in the company in order to fulfill this goal.
If your business is not cash-flowing enough money to undertake this project, then the buyer will be discouraged.
Customer satisfaction is another aspect that drives value.
Your business is nothing without customers, so with that being said, there is a large focus on how satisfied your customer base is. The best way to actually measure this metric is to quantify it.
It’s one thing to have a customer base that is satisfied, and it’s another thing to effectively communicate how loyal your customer base is, and how satisfied they are.
Moreover, you can also leverage these methods on how to prepare your business sale by analyzing the market conditions of small business sales and acquisition.
“Under New Ownership” can be three scary words for a business to go through.
When your business is built on your own work and your connections, your customers know you by name and face, and that’s a huge part of what makes your business go.
So how can you guarantee they’ll stick around through a big transition like a change in ownership?
It’s definitely not as scary as it sounds, and there are simple things you can do now to make sure your customers stay loyal to your business, no matter who’s at the helm.
Whether you’re thinking about selling or just getting prepared for the future, here are things you can do right now to grow your customer base today, and put yourself in a stronger position for potential growth and transition.
Attract and retain top talent
If you want to succeed in today’s fast-paced and constantly evolving market, it’s crucial to have top-tier talent on your side.
After all, skilled and dedicated employees are the backbone of any successful organization.
But with the job market being as competitive as it is, attracting and retaining the best employees can be easier said than done.
In fact, top candidates often have their pick of job offers, which is why you need to be proactive and creative in your approach to recruiting and retaining top talent.
The good news is that there are several effective strategies that you can use to increase your chances of getting the best employees.
If you’re considering selling your business in Texas, it’s essential to understand the complex process and take steps to ensure a successful sale.
Here are the key takeaways from what we’ve tackled so far:
- Keep the lines of communication open, learn what buyers want, and be involved post-sale.
- Have complete confidence in your decision and commit to achieving your desired outcome.
- Make sure your business is ready to be sold by preparing historical data, organizing financials, and identifying areas for improvement.
- Learn to attract and retain customers and employees before and after the transition.
We know it’s complicated, but with Tsetserra Growth Partners, we can simplify the process.
Unlike traditional private equity and business brokers who buy or sell businesses with a short-term relationship in mind, we uniquely position ourselves to purchase businesses to operate and grow them for the long term.
Don’t leave your business’ future to chance. You’ve made it this far, so send us an email and leave it in the right hands!