What to Do in Your Business if You Plan on Selling
The average entrepreneur doesn’t go into business thinking about selling it one day. Instead, they are typically focused on everything in between the start and finish of the business cycle — buildup, growth, and all the revenue opportunities. Yet, every business follows an arc that inevitably leads to an end, whether through selling, dissolving, or transferring ownership.
When it comes to selling a business, everyone has a different “aha” moment when they realize the time has come. It may be a lack of passion, a major life change, or even just a natural resolution of reaching one’s goals. Alternatively, it may be an external factor, like a new career opportunity or someone’s offer to buy that can’t be refused.
Regardless of why you decide to sell, the important takeaway is that you must prepare your business before initiating an agreement. If you’re considering selling your business, here’s what you need to know to protect your finances, your employees, and your reputation.
Preparing to sell starts the day you open your business.
While you may be busy with the many responsibilities required for a startup, the “sellability” of your business starts on day one. It’s in the way you name your business, as using an owner’s name is not attractive to buyers. It’s in the way you set up your systems, as you’ll need to remain organized and stay on top of your numbers. It’s in the way you build a team, as businesses won’t sell if your attention is required for its current value.
Simply put, the decisions you make when starting your business will influence your ability to sell it when the time comes for you to take a different direction. To set yourself up for long-term success, you must focus on working on the business rather than in it. That means building a reliable team, delegating effectively, and automating anything possible.
You don’t have to wait for an outside buyer.
Waiting for someone to show interest and close the deal on your business can take a long time and may end up stretching out the selling timeline longer than necessary. One of the best ways to transition out of your business is to groom an employee to take over ownership. If you see talent and passion in a team member, discuss the possibility of handing over ownership of the company someday. Avoid making promises, but gauge their interest and be prepared to mentor them and lay a solid foundation.
Of course, things change, and people’s life paths shift. Someone who is eager about the opportunity today may not be in a position to take over in five, ten, or twenty years. Still, it’s worth investing in the right employee to show them the ropes and educate them about what it takes to run your business. If they take you up on the offer, they will be fully prepared to hit the ground running once you pass the torch.
There are multiple ways to transfer ownership.
The manner of transferring ownership will depend on the terms of the agreement and the preferences of those involved in the sale. In many cases, there is a transitional period in which the current owner stays on the team for a designated period of time to serve as a resource while the new owner catches up to speed and learns the lay of the land. This also supports the training of incoming staff while easing current staff into new leadership.
Alternatively, some owners grant access to everything and brush their hands clean. This is often the case if they have another opportunity waiting for them, be it a new job or a business venture. While it’s a quick way to hand off your business, partnered transfers are a wiser option when possible. Dedicating even a couple of weeks to transition allows for clients, vendor partners, and staff to adjust and see that you trust the new owner.
Effective communication supports the process.
Selling a business might be your decision only, but it will impact all of your stakeholders: your clients, employees, and creative partners. Getting ahead of the curve with clear, proactive communication will pave the way for a smooth transition. How you share the news with employees will depend on the existing relationship you have with your team. Remain honest and transparent about your intentions, and walk through the process to demonstrate how you will ensure a seamless transfer of ownership.
With other vendors, there is tremendous value in the transitional style of transferring ownership — particularly if the new owner is not known within your network. During your last few weeks, focus on overseeing meet and greets to introduce everyone to the new owner and discuss why you trust them to take over. Staying onboard to see this through will ensure your business retains its industry relationships after you leave.
Take a step back when all is said and done.
Selling a business is emotionally challenging, especially if it’s one you built from the ground up. You invested so much of your time and energy into it, so you naturally want to see a shining legacy to follow. But, once you’ve finished the handoff, the business’s success is no longer your responsibility. A new owner may or may not continue the hard work you’ve put into the company — and you have to be okay with that.
Before selling, get in the headspace that you are relinquishing control and the emotions that go along with it. Someone else could come in and excel, or they could destroy it. Even a pace behind your expected trajectory can feel disappointing, leading you to question whether you sold it to the right person (or whether you should’ve sold it at all!). But remember: You sold it for a reason, and you can—and should—let go of the pressure.
No matter where your business stands today, start thinking about what it might look like to sell it one day. Opportunities can come and go quickly, so there isn’t a lot of time to think through the process and get your business ready to sell. Thus, it’s in your best interest to be as close to ready as possible at any given moment. By preparing today, you will have everything in place to sell when the time comes — even if it’s decades away.
After a decade in weddings and events, Amber Anderson, founder of Heavenly Day Events, pivoted her career into coaching others while maintaining a role in her planning company in Austin, Texas. As the host of Refine for Wedding Planners, Amber desires to coach and mentor planners via the largest Facebook group exclusively for wedding planners by offering a course, retreat, membership, and templates.
