When it’s time to move on, you can feel excited about the next stage. You might be retiring, taking up an exciting career shift or starting another business from scratch. The urge to move on quickly can pull your focus away from important details. And these can lead to mistakes. Here are 7 things to look out for when you’re selling a software business.
Most prospective purchasers take longer than you expect
Buyers need to do their due diligence. Their initial excitement may morph into a thorough, process of dotting the i’s and crossing the t’s — and so it should. Ideally, they’ll want to discuss your activities, organisation, due diligence and business planning. This is important, but prioritise those buyers who can expedite due diligence, and who are focused on the present and the future, rather than an over-interrogation of the past.
Selling a business is a lot of work
This is a dance between you and the buyer, and it’s a lot of complicated steps for both of you. You need to schedule plenty of time to work on the sale of your business, and make sure you’re entrusting experts to advise you.
If you’re finding it exhausting, that’s because emotions are involved. This is a big change. You’ve toiled for years to reach this point. You’re bound to have mixed feelings.
Selling a business is time-consuming
You’ll need to adjust your schedule and clear enough time to focus on this properly. It’s more than just the negotiations. It’s the due diligence process, financial plans and processes and the transaction itself. Factor these activities on top of the need to continue business as usual. It’s common to need extra help or resources to juggle the extra work you’ll be taking on.
The workplace will be restless
Rumours travel fast. It’s not uncommon for employees to know a change is in the works long before it’s announced. They will naturally fear change. They might be concerned about continuity of employment or product direction. You want to manage your internal communications well, to avoid any damage to your reputation or employee panic.
The show must go on
Regardless of what’s in the works, it must be business as usual. There are extra eyes on your success throughout the whole process of negotiation. You can’t afford a dip in sales just as people are so interested in your financials. If you’re concerned about letting things fall through the cracks, get help.
Feeling uncertain? That’s normal
Every important step we take in life feels bittersweet. Endings and beginning are full of nostalgia and hope. It’s normal to second-guess what you’re doing. It’s okay to question whether it’s the right time, or this is the right buyer or the right place. At the end of the day, you built this business to realise value for yourself and provide employment to a team, and this is your moment. When you complete the transaction, take a moment to acknowledge the great work you’ve done getting this far.
Everything looks rosy and you’re ready to sell. This is the moment you’ve worked so hard for, and all the sacrifice is about to pay off. One or more potential buyers is knocking at your door, and you’re excited about what’s about to unfold. Here are 6 common mistakes that people make.
Developing an exit plan. Ideally, you’ll sell your business at its peak. Too often, business owners don’t look far enough ahead. They don’t read the market effectively and panic-sell once their business is tanking. You want to maximise returns.
You don’t have to use a broker to sell your business. Every business is unique, with its own needs and structures. There are some strategies that can help you sell on your own. Get clear on what you want. People sell businesses for all sorts of motivations. You might be keen on top dollar over all else.