If you’re thinking of selling your business, you may need to meet with numerous potential buyers. This isn’t always a quick process. In some cases, it may be difficult to find a buyer. In other cases, you may have so many potential buyers that you have to decide which offer you want to take.
But no matter how the sales process plays out, these buyers are going to have questions, and it pays to be prepared. It can make the process go more smoothly and help facilitate a sale that is favorable to you and your interests. Here are a few questions they may ask that you should be prepared to answer thoughtfully.
Why are you selling?
First and foremost, determine exactly why you want to sell the business. Maybe you’re just moving on to a new opportunity. Maybe you’re retiring. Perhaps you have another business idea you want to explore. Maybe the economy has changed from when you started the business. A buyer will want to know why you’re trying to get out of the company so they can determine if that tells them anything about whether or not this is a good business opportunity.
What is the company worth?
Next, you want to do a valuation to determine what the company is really worth. The value of that business is likely much more than the value of the physical assets you own. You may need to work with an official business appraiser. You’ll need to consider things like how much income the business generates every year, how much debt the company holds, if there are any projections for growth in the future and much more. In some cases, there can be a bit of back-and-forth negotiation as buyers and sellers try to come to a number that they both agree on.
What will come with the business?
Finally, buyers simply want to know what they are going to get for their investment. Do they get the rights to use the name and all of the branding? Are they purchasing any tangible assets or inventory that the business still has? Are employees going to stay at the company after the sale, giving the new owner a workforce that is experienced and proficient?
These are just three examples of questions you’ll want to consider when selling a business. Do not hesitate to seek legal guidance if you, yourself, end up having questions or concerns as you prepare to sell.