Before going to market, it is important that a business owner understands the value of the business and if he or she is prepared to sell for that price. If the business owner is not prepared to sell for a realistic price, the value of the business needs to be improved before it is put on the market. If it is not possible to increase the value of the business, the business owner can consider not selling but managing the business for lifestyle.
It is important to take into account a realistic timeframe for the sale. If the value of the business is acceptable to the seller, the timeframe for the divestment can be quite short. However, if the value of business falls below the seller’s expectations, a realistic time frame needs to be applied to the process of building value.
In order to successfully negotiate the sale of a business, the seller needs to understand the needs and drivers of potential purchasers. The seller must also understand what types of elements lead to a high valuation or a lower one.