Do These Five Things to Sell a Business Successfully
As a business owner, you’ve undoubtedly put your heart and soul into your print shop business. Long hours, times of lean income, and sacrifice have been the name of the game. Now, you’ve decided to sell the business. But remember, just like when you were establishing your business, there was trial and error and most likely a learning curve—now that you’re selling it, you’re back in those unchartered waters. However, we have some effective tips for selling a business.
1. What are Your Goals?
Just like creating a business or buying a business is a process, the same is true when you want to sell a business. Based on information from Forbes, part one of this process is to determine your goals. For example, are you interested in selling this entire business and walking away with a check in your hand? Maybe you want to slowly break away from the business before retiring. What are your needs? You basically are working backwards and saying, what do I hope to accomplish when this is all said and done.
Step two in understanding how to sell a business is to get organized. If you were selling your home, for example, you would clean up before prospective buyers came to look at it. You want to put your best foot forward. The same is true with your print shop business when it comes to your books. No one wants to purchase a business that appears to be a mess. You want to get the best deal possible, and that means getting your financials in order.
There will be many eyes looking at your financial records, be it accountants, lawyers, valuation specialists and prospective buyers; now is the time to gather everything up and get things in order. You’ll need three years of tax returns available. You may be asked to provide year-to-date financials. Better to have these materials ready to show good faith and transparency. If need be, hire a small business accountant. It’s an investment that will go a long way toward you getting the best price in the long run.
Experts also agree that spiffing things up can’t hurt. Making your asset look it’s best can increase your asking price. Put a little more into marketing to boost sales. This makes would-be buyers take a second glance when they see a thriving business.
3. Bring in the Experts
You’re a print specialist, not an expert on pricing small businesses. Consider hiring a valuation expert to come in and determine the value of your business in today’s market. According to the U.S. Chamber of Commerce, your business value is based on three to six times your current cash flow and EBITDA (earnings before interest, taxes, depreciation and amortization). If you don’t understand how to calculate that, you may not price your business correctly. Bring in a third-party valuator. You typically pay a flat fee for their services and save yourself a lot of hassle when it comes to potential offers coming in.
Think about this, too. If you’re saying, how do I sell MY business, you’ve made it very personal. Hiring experts to guide you takes the emotion out of this and maintains the business integrity of this deal.
Once you know the value of the business, how are you going to price it? What’s the sale price and will it get you the profit you want to achieve your goals?
Just like the accountant and the valuation expert came in, a business broker will help you get top dollar for the business. They are the match-makers that connect buyers and sellers. They may enlist the assistance of an attorney to prepare NDA’s (non-disclosure agreements) to protect your privacy. But remember, brokers are paid on commission at closing, so that will mean five to ten percent off the sale price goes to them.
4. Exit Strategy
When you start a business, you should have an idea of how you will leave that business. Your exit strategy is your contingency plan if you’re forced to sell or unexpectedly decide to sell. If you didn’t create a plan from the beginning, better late than never. Consider these options. Perhaps you want to pass down the business, maybe you want to retire in a few years and you’re setting up the sale, or maybe the market looks good and you want to sell immediately. Whatever the case, you’ve got to plan it out.
5. Sell to a Franchise
Another idea is to turn your independent print shop into a marketing franchise. That’s one of the offerings here at Allegra. Allegra Centers provide graphic design, printing, mailing, promotional products and marketing services needed by virtually every local business and institution. As a Franchise Member, you’ll benefit from more than 30 years of documented success by transitioning your operation via our Advantage Program. You’ll gain the opportunity for greater sales through diversification while sustaining the legacy of your business.
Designed for independent printers, the Allegra Advantage ProgramSM lets you access the many benefits of the Allegra Network by transitioning your business to our brand.
With it, you’ll gain the tools and franchise support programs needed to diversify beyond printing into direct mail, marketing services, promotional products and/or wide format printing. In doing so, you can increase sales and earnings, build greater equity, operate more efficiently and position yourself for a more profitable exit.
Owners can benefit from the proven Allegra franchise business model on a long-term basis or if interested in retiring or moving on soon can participate with just a five-year commitment.
It’s a unique opportunity and one with the goal of growing the value of your business, making it more saleable and helping you sell it when you’re ready, without the expenses associated with working through a business broker. Our experienced mergers and acquisitions team make sure everything goes as smoothly as possible for both the seller and buyer.
Becoming an Allegra Center gives you a profitable option as you prepare to sell your business. We’d like to help you with that. Download our free brochure, An Opportunity Awaits, for more ownership information.