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The process of selling a business is both challenging and thrilling. As a founder or business owner, you've put in several years of hard work into your company to get to a point where you can sell it.
But you have only one chance to get it right amidst the challenges and thrills of the selling process, both of which can prevent a successful exit.
One way to navigate the process well is to ask lots of questions, starting with yourself, before asking your buyer, M&A advisor, employees, CPA, and M&A attorney.
Making a checklist of all the important questions will take a lot of work, and we at Exitwise can help you hire and manage an elite team of M&A experts. Consult our M&A advisor for free to get started.
Asking the right questions before you sell your business can make all the difference between a successful and a failed exit.
Here's why you'll want to ask plenty of questions:
If you need help with the sale, you can hire the right experts, such as M&A attorneys, business brokers, and tax accountants.
Since you'll suddenly come into a lot of money, you'll also need a wealth advisor to help you figure out ideal ways to use the money.
You only have one chance for a great sale, and the right questions can help you avoid costly mistakes.
For example, a deep understanding of what buyers need before and after the sale will protect your legacy. Your buyer will acknowledge your commitment to a healthy relationship and successful sale that caters to your interests and theirs.
Even if you sell your business successfully, you may not be satisfied with the whole process. Asking questions can shape the path to a sale that leaves you happy.
You'll save time and money for yourself and other players in the sale process since you can see their motivations and commitments.
The right questions asked in the right manner will show you where to spend your time. For example, if you notice a certain buyer isn't a good fit from the start, you won't have to spend any more of your valuable time trying to convert them.
Just as you want to work with potential buyers and M&A experts worth their salt, the reverse also applies. Every stakeholder in the sale process wants to work with a seller they can rely on and trust.
Asking the correct questions shows your buyers and M&A experts that you are knowledgeable, experienced, and willing to go the extra mile to achieve a successful transaction.
If you can't adequately or honestly answer most of the questions, consider modifying your questioning approach or the exit strategy altogether. You may have to hold a little more until you are better prepared.
Selling your business involves more than just the sale price. You also need to ensure the sale aligns with your business goals and maintains the legacy of your business.
For most founders and business owners, selling a business is one of the most important financial, personal, and professional decisions they'll ever make.
As such, the more deliberate and honest you are in your path forward, reasoning, and thinking, the better the sale outcome and the happier you will be.
Here's what to ask yourself:
If you can map the right path forward based on your honest answers, you'll have an easier process, making it easy for M&A experts and buyers to work with you.
Asking potential buyers questions is a great way to screen, shortlist, and qualify them. The exercise helps you determine whether their interests are genuine and aligned with yours, which is crucial for ensuring your business's legacy continues.
Additionally, you can tell from the start if a certain buyer is a good fit based on their financial capacity. You want to avoid going through a detailed process only to find out when it's too late that they can't afford the business, even with M&A financing.
Be sure to ask the following questions:
Besides checking out the answers to these questions, consider how the buyer and their team answer them. Read between the lines or listen keenly to determine their level of confidence and assuredness and the probable ease of working with them.
When selling your business, it is advisable to work with an M&A advisor right from the start to leverage their industry knowledge and pool of potential buyers.
To find the best M&A advisor, you'll need to interview them to learn more about them, their industry knowledge, past success, and ease of working with them.
Here's what to ask the advisor:
While looking for an M&A advisor yourself, you can save time and money working with us at Exitwise. We will help you find, interview, hire, and manage the best advisors based on your specific needs.
Reach out to our team today to get started with the process of finding and managing the best M&A advisor and other experts.
At Exitwise, we also help you hire and manage knowledgeable and experienced M&A attorneys to help you with all the legal aspects of selling your business.
Here's what you'll want to ask your M&A attorney:
Finding an M&A attorney who can conclusively answer these questions isn't enough. Be sure to listen keenly to tell if they are easy to work with and genuinely interested in helping you protect your business goals and legacy.
Your employees know your business inside-out and are well-placed to help you identify crucial aspects of the sale that you might have missed.
For example, they can tell you the biggest strengths of the business, which you can leverage to get a higher sale price.
Here's what you'll want to hear from your team:
When it’s the right time to tell your employees about the sale, remember to listen to their opinions and concerns. It's in your best interests to ensure they are happy during and after the sale because you want to preserve your legacy.
A certified public accountant is a crucial M&A team member to hire right from the start. They can help you understand the financial status of your business and the importance of the quality of your earnings in maximizing business value.
Here's what to ask your CPA:
Another critical reason to hire the right CPA is to have them help you decide on a deal structure with the most favorable tax implications.
A CPA can also show you how to avoid taxes when you sell the business, which can significantly increase your take-home amount.
There are many general questions to ask yourself when preparing for the sale. These cut across the board from increasing the value of the business to the welfare of your employees and customers.
The good thing about this stage is that you don't have to go through it alone. You can work with us at Exitwise to hire M&A experts to help you. The experts will even help you determine the necessary steps to improve the value of your business.
What happens after a business sale is highly important and can make or break your legacy.
The questions below will help you understand your post-sale responsibilities to the new owner and the former customers and employees.
Another critical post-sale aspect you shouldn't overlook is what you'll do with the sale proceeds. Receiving such a huge amount with a poor plan can mean losing it all in no time.
While this is a highly detailed list of the fundamental questions to ask to inform your business sale decisions, it's not conclusive.
An M&A team can help you uncover many other crucial questions. At Exitwise, we’ll ensure you hire the right team that will help you ask the right questions and make a successful sale.
You can consult our M&A advisor for free about setting up your dream team to help you understand each stakeholder properly and prepare you for a satisfying sale at the best price.
Let Exitwise introduce, hire and manage the best, industry specialized, investment bankers, M&A attorneys, tax accountants and other M&A advisors to help you maximize the sale of your business.
