In many cases, your own company is a life’s work and the sale of it needs to be carefully considered. With these precise considerations and preparations, you will make an informed decision about whether or not you should sell your business now.
Am I emotionally ready to sell my business?
Ask yourself: “Am I emotionally ready to let go?” Selling a business is often associated with a feeling of loss. Make sure you are ready to part with your life’s work without regrets later. Look at the questions listed. How many questions do you tend to answer positively or with “yes”?
What questions should I ask myself?
self reflection
- Feelings and emotions : How do I feel about the idea of selling my business? Am I excited, anxious, sad or relieved?
- Personal values and goals : How does selling the business fit with my long-term personal and professional goals?
- Identity and self-esteem : To what extent is my self-esteem and identity tied to owning and running this business?
Practical considerations
- Financial security : Have I carefully reviewed my financial situation after the sale? Will I be financially secure?
- Future plans : What are my plans after selling the company? Do I already have concrete ideas or projects that I would like to pursue?
- Responsibility to stakeholders : How will the sale affect my employees, customers and partners? Have I considered their perspectives?
Support systems
- Family and friends : Does my personal environment support me in my decision? Have I taken their opinions and feelings into account?
- Mentors and advisors : Have I spoken to trusted mentors or advisors about my decision? What advice did they give me?
- Emotional and psychological support : Do I have access to professional support, such as a coach, to help me cope with this big change?
future vision
- Fulfillment and meaning : Will I be able to lead a fulfilling and meaningful life without my business?
- Control and influence : How will I deal with no longer having control over the company? Am I ready to let go of this influence?
- Learning and growth opportunities : What new opportunities for learning and growth do I see in my life after the sale?
Assessment and decision
- Pros and Cons List : Have I created a detailed pros and cons list that weighs all aspects of the sale?
- Intuition and gut feeling : What does my gut feeling say? Are there any inner resistances or strong positive feelings that I should consider?
- Take your time : Have I taken enough time to make this decision or do I feel pressured?
What is my company worth?
Have your company professionally valued. Many sales fail due to unrealistic price expectations. If you know the value, it will be easier to get a fair and market-based price.
The Nimbo online company valuation provides you with a serious first indication.
How can I optimize taxes before selling?
Find a tax advisor who specializes in company sales early on and get advice on what options are available and what measures are necessary to optimize the tax burden surrounding the company sale. Depending on the legal form of your company, you have different options.
Is the company dependent on me?
Nothing can be done without your presence? Then that has to change. Make sure all existing processes and systems are documented. Invest in the training of suitable employees and gradually hand over your functions and activities to a deputy or to a management team. A strong management team that is willing to stay after the sale will ease the transition and increase the value of the company. Would you be willing to stay with the company for a transitional period?
Are there dependencies on certain customers or suppliers?
A diversified and loyal customer and supplier portfolio makes your company attractive.
Are you dependent on a few customers or on a single supplier? Small businesses should always strive to minimize their dependence on a few customers and suppliers. Try to strengthen your position. Diversification, building internal capabilities, strategic partnerships and continuous risk management can be examples of measures that can help strengthen their independence and increase their resilience to market changes. The Nimbo Goodwill Test takes these dependencies into account in its evaluation.
Which contracts do I need to check before selling?
By carefully reviewing existing contracts, potential obstacles and risks can be identified early and dealt with accordingly. Check whether there are special provisions in the event of a sale and whether there are clauses that make transfer to a new owner difficult or impossible, or whether certain provisions could pose a financial risk for the buyer. Be sure to check out the following contracts:
- Partnership agreements and statutes
- Credit and loan agreements
- Employment contracts
- Rental and lease agreements
- Customer and supplier contracts
- License and usage agreements
- Insurance contracts
- Guarantee and warranty contracts
- Confidentiality and non-competition agreements
Is all intellectual property protected?
Make sure patents, trademarks and copyrights are properly protected.
Is this currently the right market environment for a sale?
To find out whether the current market environment is right for selling a company, the following steps and sources can be helpful. By combining these sources and methods, you can get a comprehensive picture of the current market environment and make an informed decision about whether the time is right to sell your business.
Where can I find information about the market environment?
Economic indicators :
Economic cycles : Pay attention to the general economic situation. A growing economy is often a good time to sell.
Interest rates : Low interest rates can make it easier for buyers to obtain financing, which can have a positive impact on the selling price.
Stock market : A strong stock market can be an indicator of a positive market environment.
Industry-specific analyses :
Market reports and studies : Read current market analyses and industry reports published by consulting firms such as PwC, Deloitte or KPMG.
Industry associations and organizations : Many industry associations publish regular reports on the state and trends in their respective industries.
Company valuation :
Expert Valuation : You can have your business valued by an expert to get a realistic selling price and assess the market potential.
News and financial media :
Financial news : Follow financial news and business magazines such as Handelsblatt, the Financial Times or the Wall Street Journal.
Online platforms : Websites such as Bloomberg, Reuters or CNBC provide current information and analyses.
Networking :
Industry meetings and conferences : Attend industry meetings and conferences to learn first-hand about current trends and opinions.
Exchange with colleagues : Talk to other entrepreneurs who have recently sold or are looking to sell.
Regulatory framework :
Legal changes : Be aware of changes in legislation or regulation that could affect the sale of businesses.
Who is a potential buyer?
Is an internal succession conceivable or do you want to sell externally? Do you want the optimal succession solution for the continued existence of your company, do you want to ensure the continued employment of your employees or do you want to achieve the highest possible sales price? Who is a potential buyer? Different types of buyers, such as strategic buyers or financial investors, offer different advantages. Choose the right type that suits your goals.
What is my negotiation strategy?
Make a list of your priorities and order them by importance. While it is important to have firm ideas, flexibility in certain areas is necessary to move the deal forward. Be willing to compromise, but also know your deal breakers.
And now? What next?
If you were able to honestly answer “yes” to the question “am I emotionally ready to let go of the company?”, work your way through the remaining points step by step. With careful preparation, good planning and, if necessary, competent support, you can sell your company successfully and at a good price.