Which are the principal barriers of selling a business? Do you know how to deal with them? The matter at stake is a complex process that requires the assistance of a consultant service that provides trust, transparency, and confidentiality to the business owner.

These are the three principal barriers for selling a business:

• Dealing with confidentiality.
• Giving trust to the advisor figure.
• Knowing how to find the best buyer.

Dealing with confidentiality

The desire of selling a business comes from a variety of reasons. For example, wanting to embrace a new adventure, feeling that you have “already done it all” or the tiredness of a long professional journey.

When protecting the confidentiality of selling a business we always have to understand the importance of leaving aside personal interests in communicating this decision, since these can affect business development.

It is of vital importance to know how to manage the following aspects of confidentiality when selling a business:

Confidentiality in the internal atmosphere of the business owner:

Many owners make the mistake of communicating this decision to their internal staff too soon and without the necessary cares. When this happens the probabilities of losing competitive strength increases, talented employees notice a lack of leadership and look for other professional exits and the snowball begins to grow to the point that a great business may fall apart.

Because of this, it is vital that the owner communicates this to the precise people in the correct moment. Also, a positive and good attitude should be maintained within the company, independently if the selling of the business will happen or not. This way, employees will be consistent with their good work and the rentability of the company will not be damaged.

Confidentiality in the external atmosphere of the business owner:

One of the greatest fears an owner has when thinking about selling his business is that they see their competitors as the only possible buyer of their company thanks to a lack of knowledge and information. Owners do not know about the techniques of how to manage confidentiality or strategies that allow them to find other buyers aside from their competitors. As a result, owners are paralyzed because of fear and they let pass what can be a good selling opportunity.

Lets take into account that the process of selling a business begins the moment the business owner first thinks about it. To avoid making these mistakes it is vital the support and guidance of a professional consultancy service that provides a high level of transparency and trust.

Confidentiality is just one of the principal barriers of selling a business. The owner also must know how to work with a team of advisors that are well qualified, have experience and can land a successful operation.

Giving trust to the advisor figure

There are many types of advisors out there who can be presented to the owner as facilitators, brokers, consultants, auditors etc. In most cases these so called “advisors” do not maintain an adjusted profile and that is the reason many operations do not succeed. This process requires and demands the advisor to manage techniques and knowledge that only professional M&A advisors know.

Therefore, when you think in advisors, you must seek for those whose professional nature is adjusted to what you are trying to do, in this case selling a business.

Either way, to avoid working with a pirate advisor or someone that doesn’t have the capabilities to carry out a corporate operation, listen to different financial advisors and then check out their success history in similar operations. Remember that correct guidance leads to a successful sale.

Therefore, it is important to let yourself be guided by the right advisors so you can also find the ideal buyer for your business.

Knowing how to find the best buyer for your business

The search for the best buyer and a good negotiation are key elements for a successful sell that reflects the hard work of the business owner. Not only should you find a solid offer, but also a buyer that transmits confidence and tranquility to the business owner.

This is why it is important not to make the mistake of selling the business to the first company or investor that makes an offer. The business owner should not make the decision without a previous in depth search and a good analysis of all the possible offers and opportunities.

In many occassions, finding the ideal buyer for a company can result in a long and exhausting process. For this reason, it is important to answer the following questions:

• Which are the different types of buyers?
• How to know if a company might be of interest for a buyer?
• Which are the methods for finding ideal buyers?

We invite you to know more about this area in the following article.

Overcoming the principal barriers of selling a business

Thanks to the complexity of this process, the importance of what is at stake and the dynamics that a corporative operation demands, our recomendation is to continue this process by the hand of expert advisors with enough experience and history that can help you overcome these barriers. If you are interested in selling your business contact us and we will help you.

What comes after the sale? Most companies are born from a dream and when that dream is fulfilled another one is born. Therefore, after enjoying professional success and having conquered the business world, what will that new life focus be?

If we keep climbing the mountain that has already been conquered, then we fall in the hands of inertia and redundancy. That’s why the business owner needs to think about a new mountain to climb, one which is not build on success, but on sense.

It is normal that any professional that comes close to maturity feel the need to give back to the world what he has received. It is here when he understands that we only live once, and that true happiness is found in giving. This translates in leaving a legacy.

What does leaving a legacy after the sale means? 

After the sale of a business we have to think about living for the wellbeing of others and not for ourselves. It consists of being thankful for the privileges you had and change the focus of your life objective. In this case, an objective that is defined by the number of lives impacted, instead of the size of the bank account.

When the business owner reaches economic success, he discovers that there are two sources of unhappiness in life:

• Not getting what he wants
• Getting what he wants

He undesrtands that it is not enough having a prosperous life, but it should be productive by generating good for others. He gets that he has lived for efficiency: doing things right; but he has not been effective: doing the right things.

When the answer to the next questions are not fulfilling, it is when the owner realizes that something must change:

• With what amount of profit will I be happy?
• Will I keep on moving forward with the same old objective and never reach and end? Or should I explore new opportunities?
• Have I become a prisoner of my own success and business?

This is when the owner begins to dream with having more control over his life. He sees that he has the experience and tools to produce a positive impact that goes beyond his salary and dedicates himself to improve the life of others.

Here is when a new adventure begins, and the first step is to sell the business. The investment that will be done now will not be to generate more wealth, but to give to a bigger purpose. It is the beginning of a new dream, an opportunity to channel energy and resources towards a goal that supports others. With this in mind, the owners reach freedom to choose what he wants to do with his life, which results in an unimaginable level of happiness.

Clearly there is something more in life than just business. A lot of businessmen should ask themselves: What is my true purpose? What do I want to be remembered for?
Our success will be empty until we add meaning to it. It is about a change of heart, perspective, and priorities.
Have in mind that you are not what you want to be, but you are what you do. If you are unhappy, decide and act now, we only live once.

*Source of article www.expansion.com/blogs/quemada/2019/11/22/del-exito-al-sentido.html  By:  Enrique Quemada

*Music of video: https://www.bensound.com

Many business owners reaching the end of their professional career should get familiar with the selling process of a company. Without a doubt, this is a complex process that has to be dealt with extreme care and attention in order to protect the main interest of the business owner: selling the company at a fair price.

Taking into account that all the phases of a corporate operation are highly important, in the following article we will analyze the most delicate points present during this process. This way, you will be more prepared for when you consider selling your business. These points are the following:

• Know how to value your company to set a fair selling price
• Find the ideal buyer for your company
• Understand the due-diligence process
• Understand the structure and functions of an SPA

How to value your company and why it is important

Maybe you never thought about how to value your company because you were not aware about the importance this factor has in the M&A world. Nevertheless, knowing the value of your company is vital for a successful sale.

A lot of business owners ignore the importance of making an in-depth valuation analysis, this is essential not only for a good sale but also so that we can apply improvements within the company and upgrade its performance.  Generally, what we believe a company is worth differs with what it is really worth.

The valuation of a company is a technical analysis that requires a deep and fundamental financial know-how. The first step is to determine the characteristics and factors that provide value to your company so an educated guess can be made. If you want to know more click here.

To sum-up, knowing how to value your company is ideal for: 

• Preparing a good negotiation and being able to maximize the price of the company.
• Finding a middle ground between the two parts as the views of the buyer and the seller tend to differ on the value of the company.
• Understanding the position of the company in the market compared to competitors.

It is an important first step for starting a corporate operation in the right way. If you want to read more on the topic go to our article “How to value a company? The usefulness of the business valuation process”.

How to find the perfect buyer for your company?

It is important to know how to value your company, but also finding an ideal buyer for it. You need to find a solid offer as well as a buyer that will transmit confidence and tranquility to the business owner. And this is no easy task.

The search of the perfect buyer and a good negotiation are key elements for a successful sell that reflects the hard work of the business owner. That is why it is important, first, to avoid falling in the mistake of selling the company to the first counterpart that makes an offer, and secondly, to know how to identify a good alternative.

To be successful  in this step of the process it is necessary to answer three questions:

• Which are the different types of buyers?
• How to know if a company might be of interest for a buyer?
• What are the research methods for finding ideal buyers?

The question is: How? This general overview can help.

Types of buyers:

Knowing the profile of the businessperson or entity that is willing to buy your company is key. The 6 main types of buyers are the following:

• Suppliers
• Current clients
• Foreign companies
• Venture capital
• Competitors
• Companies from other sector

Analyze or identify what type of buyer is suitable for you is not easy, therefore it is important to know the different interests each buyer has and if your company matches them. Due to this, it is important you are aware of the following matters:

• Knowing the trends in the sector and the participation of the buyer in it.
• Knowing the distribution of the different business lines of the potential buyer.
• Knowing the strengths, weaknesses, opportunities and threats of the potential buyer.

However, how can we answer these questions? We recommend you to apply the following tools:

• SWOT Analysis, it will help you understand the strengths, weaknesses, opportunities and threats of the sector, your company and the company of the buyer.
• Porter Five Forces, will help you know if the sector of your company seems attractive for a certain type of buyer.
• Boston Boxes, they are useful to analyze the business portfolio equilibrium of a buyer and identify why your company could add something valuable to a specific buyer.

Nonetheless, this step does not end here. It is extremely important to know how to use the different methods that will make you able to identify the perfect offer and negotiate a benefitial transaction for both parts.

The next thing we will do is understand  one of the most delicate concepts inside a corporate operation: the due diligence.

The due diligence

One of the main points during the selling process of a company is the due diligence. During this phase, the level of transparency and precission from the seller should be extremely high, as it is here where the buyer will be able to see in depth and full detail the company he is about to acquire.

It is a crucial step where all the process can collapse or keep on going. This is why it is of extreme relevance to know how to manage this step.

In other words, the due diligence is an analysis of everything that is under the tip of the iceberg of the company to be acquired. Due to its level of delicacy, we recommend you to manage it with extreme caution, and if possible with the support of a professional advisor.

You would think that after the test of the due diligence the process would be over, but there is still left one of the key parts of the process: the sale and purchase agreement (SPA).

The sale and purchase agreement (SPA)

Once the buyer determines the real value of the company that will be acquired and the due diligence is finished, it is time to decide the selling price and prepare the sale and purchase agreement (SPA) of the company. This requires of a lot of care and meticulousness.

One simple paragraph can make a successful operation become a failed one. With this in mind, the SPA is not something to take lightly due to its complexity. The most frequent question is: what is the content of the agreement?

Generally the agreement is made up of 5 sections:

• Description of the transaction
• Terms of the agreement
• Representations and guarantees
• Limited responsability
• Conditions of the agreement

Each of these sections have a high level of importance and they should be perfectly executed to assure a successful operation. We invite you to know more about them in the following article.

How to sell a business: a real life example

Knowing how to sell a business can be complicated, that is why we want to clear all the doubts you may have regarding the selling process of a business so you can focus on taking the best decision for your future and the one of your company. We wanted to take the opportunity to tell you with full details the acquirement of SumaCRM by Efficy. You might be wondering what is unique about this operation, and the truth is the story behind it is really special, as from the blog of SumaCRM they retransmited weekly the whole selling process with real data and full detail.

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