Do you have a tech startup that you’re ready to sell? Is your venture at the point where you can attract investor attention and negotiate a purchase that will allow you to walk away with a sizable profit?
If you think you might be ready to reap the ultimate benefit from all your hard business work, consider these five tips for preparing your company for sale:
1. Start learning and preparing — yesterday
Selling your company takes both a lot of work and a lot of waiting. Start the process ASAP.
Research your industry carefully and examine the market prices for similar businesses. Make first contact with potential buyers and consultants. Start charting your business value and creating potential purchase scenarios.
Start the official business valuation process through a professional party. The sooner you began these key steps, the more prepared you’ll be.
2. Have a long-term plan
Just because you plan on selling your business a year or two down the road does not mean you should stop strategizing. Instead, continue your business plan for at least several years.
Any potential buyers or inspectors will want to see the future plans for your company as well as current successes. This indicates greater stability and a better chance at future profits, so keep on planning ahead, even if you’re also planning on leaving the business.
3. Gather the evidence
What makes your company great? What ratios indicate your stability, your profits, your great debt situation — or any other statistic that shows how attractive your company would be on the open market?
When you get ready to sell your tech startup, you need to gather proof of your company’s solid record and be ready to display it to any buyers. A very common process in the negotiation is a full inquiry and inspection into your business from a third party.
Gathering the necessary financial statements will make this process much simpler and faster. It also gives you the perfect preparation for your sales pitch, allowing you to identify the strongest parts of your venture that will hold the most attraction for buyers.
4. Prepare the team
Let your employees, partners, and associates know what you’re planning. Explain the situation to them and recruit them to help you get the business organized.
Your team will be invaluable when it comes to making the company look as sleek and stable as possible. Ask for ideas, offer additional explanations, and be open with everyone.
5. Dig down to the details
Know exactly what you want. Understand not only the price you want to sell for, but any loans, caveats, and negotiation tactics you will be willing to accept.
Set clear deadlines that you are willing to accept, and know your personal financial goals. This will help make negotiations more straightforward when the real work begins.