How should you assess the 10 skills that make a qualified seller for your business ? Nowadays, there are many small-sized business owners who eventually make a decision to sell their business. The reasons for them of their business selling are quite various.
Some of them have a wish to enjoy their retirement life out of those hectic business activities. Meanwhile, other business owners want to sell their business because they could not wait any longer to discover their business prospect.
Selling your business cannot be considered as a simple task to do. Instead, it is a quite tough and complicated one, especially if you do not know about the steps that you need to do, or you might do not have any skills that you need to have in business selling.
Well, if you are listed in those business owners who are aiming to sell your business, no matter what your reason is, you need to consider some important things that you need to practice on your business selling process.
To help you out in this case, below are the 10 skills that make an awesome business seller for you to check out. But before that, there is one thing to ease your mind, all of these 10 skills are learnable if you really want to transform yourself become an awesome business seller and get the highest profit of your business selling as well.
An awesome business seller needs to be fluent in timing the sale
Your business’ history, along with its financial performance is considered as the main essential aspects in measuring the price of your business at selling time.
A business seller who decides to sell its business after steady developments over the years would naturally request a bigger price rather than a business seller who chooses to sell the business right after 2 or 3 years development.
An awesome business seller would be able to measure the business environment
The business environment where your company is running the business is absolutely also considered as an essential skill in measuring the requesting price for your business selling.
If your company is running the business in a market industry that struggling throughout a recession, then as a business seller, then you would need for a better time in selling your business.
Some companies might able to lowly the flow when the market industry that they running their business in is stuck in a slow cycle. Plus, there might even some industries that would never able to create any recovery.
For this reason, an awesome business seller has the skill to determine whether the recessions are only an unpredictable part of their business cycle, or whether the recession could be a warning signal for the business.
An awesome business seller would be able to evaluate the stock sales and asset sales
An awesome business seller has a skill when he or she would able to decide previously whether to sell out the stock or assets of their business. In terms of a stock sale, the business seller would receive an agreed-upon price designed for his or shares in the business. Once the stock would be transferred to another owner, then the buyers would step in and running your business.
Usually, some business selling in the context of stock would give the buyer not only the entire assets of your company, but it would also give the right for the buyer to possess the entire liabilities of your business as well.
This type of arrangement is frequently attracted the business seller due to they could get some benefits from its tax.
On the other hand, in terms of asset sale, the stock is not a part of the image. Instead, partnership and single proprietorship should be transferred to the new owner.
In this arrangement, the business seller would hand over the entire business inventory, equipment, patents and trademark, trades name, the “goodwill” of the business, along with some other valuable assets for an agreed-upon price. Then, the business seller would use that money to pay for any debts.
An awesome business seller has the skills to prepare the business for sell
When you are going to sell your business, then you need to gather a large variety of your business’ information to be provided for the potential buyers.
Thus, an awesome business seller would have the ability to collect all the business information such as mentioned below.
Financial information about the business
An awesome business seller would still need to prepare the financial statements, along with other important financial documents to be presented for the potential buyers.
This financial information will include a balance sheet (completed with detail information on both accounts payable and receivable, business inventory, liabilities, mortgages payable, and so on), and income statement, as well as a valuation report.
The Legal Information
An awesome business seller has the skill to prepare the essential information regarding the legal issues which belong to the company.
These type of documents would be like partnership agreements, bylaws, supplier contracts, franchise agreements, the status of stock, and more.
The Marketing Information
Smart buyers would definitely want to know the detail marketing information on your company, as well as the information on the main market field of your business, the market share, along with your business’ marketing expenditures.
For this reason, an awesome business seller has the skill to prepare all the information needed to be viewed by the potential buyers.
The Business Activities Information
Lastly, an awesome business seller should be prepared to deliver a piece of complete information on your business’ daily activities. This would include the company policies, personnel schedules, organizational chart, rates of payment, the job description, and also the benefits as well.
An awesome business seller has the skill to locate the prospective buyers
Almost all of the business owners would sell their companies to the external buyers, which are the buyers who are not their current partners or employees.
An awesome business seller would make an attractive advertisement of their business selling, use his or her personal contact lists as the reference, or engage the mediators.
An awesome business seller realizes properly on the value of their business
This skill is a must-have one to make a business seller become an awesome one. An awesome business seller would able to realize properly on the value of his or her business.
With this ability, an awesome business seller would be able to make a correct price which worth the company. It is obvious that all of the business sellers who are aiming to sell their business are definitely want to get the accurate price which also represents the value of their business as well.
For this reason, this skill must be learned by the business owners so that they would able to not only predict, but get the accurate price of their business.
This can be done by doing the evaluation on the profit that the business has been making in the market, the number of customers, the reputation of the business itself in the market, and so on. Thus, this is an essential skill that would able to lead a business seller to become an awesome business seller.
An awesome business seller can sign the agreement for earn out
The earn out is the agreement for the sellers. The seller must choose a portion of the price for the selling annually for the decided or defined period of time in the agreement for the company underneath the new ownership of the company.
This agreement shows the more detailed aspects of business including the fixed period of time out for earnings under the new ownership of the company. It also show the business selling as well as the generated profits of the company with in the time that will decided between agreement parties.
Sometimes these kind of agreements employs while the seller may not get the particular price due to the concerns of the potential buyer. Furthermore, the earn outs may be calculated on the agreed figures.
An awesome business seller can sign the agreement on installment sale or payment
Many seller sell their product to those shopkeeper or the customers in the market who are not able to pay the full payment or those customers can not lie in the condition that they can pay whole payment.
At this stage, the seller can sign an agreement with customers to pay their payment in the decided time that are agreed upon on the specific condition.
The customer will pay the down payment and he can pay remaining balance amount the specific decided time that will provide the relief to the customers from the buyers.
An awesome business sellers agreed upon the Leveraged buyout
The leverage buy out is also purchasing agreement that shows and enlighten some aspects of the agreement. company or the customer can purchase the products by taking loan from the seller whenever the company want to purchase the products in bulk form.
The seller gives loan because company has to purchase the products first and then the company will start the process on the products. This kind of strategy to perform some kind of process on the products require more money for that thing. So that’s why the seller will provide the loan to the company.
When the company sells those products then the company pay the loan taking amount to the seller. If you take a look on this strategy then you will get more benefits by taking the loan amount. But this strategy will responsibility in the sense of burden on the company.
This skill is considered dangerous for the company business because if the company or products of the company will not be sold then the company can be bankrupted. I personally recommend you to not take loan for your business.
An awesome business seller can close the deal
The most interesting thing is that whenever the deal struck under some kind of issues you will have to notify the second party before closing the deal.
You will close the deal when the contradiction occurs with the buyer with the penalty which is decided in the agreement including the financial statements, license for the transfer, and the other conditions verification.
In addition, you will need to compile many documents to complete the transaction with the buyer.