Selling your business is a big decision, but finding the right buyer is an even bigger one. After all, you want to make sure you get the best deal possible. At Leap Partners, we work with a lot of different HVAC and Plumbing owners and have purchased 37 businesses over the past 14 years. We pride ourselves on quick, transparent, fair, and customized deals. Your business is unique, so your deal should be too. Here are a few pointers we like to give anyone starting the process of selling.
Step 1: What Are Your Goals?
What are the goals you hope to accomplish when you sell your business? Are you looking for a quick sale so that you can retire and enjoy life without having to worry about work? Or are you more concerned with making sure that whoever buys your business carries on its legacy and continues its success long after you have left? Knowing exactly what kind of outcome you would like is essential in determining if now is the right time for you to sell your business. Your answers to these questions is also key in deciding who to sell your business to. If your goal is to find a buyer who will take care of your employees and will invest in carrying on your company’s legacy, you might find the company who offers the highest price may not share your same goals. It is better to know that up front.
Step 2: The Right Buyer Makes All the Difference
The next step is to find the right buyer. The right buyer can make all of the difference in the world. So, how do you find the right buyer? Here are a few things to evaluate.
1) Is the buyer financially and operationally qualified?
The key is to find a buyer who not only can afford to purchase your business, but also has experience and success running a business like yours. In fact, it may be best to find a buyer who has diverse experience operating many different plumbing businesses. This will help guarantee you, your company’s legacy, and your employees are in good hands.
2) Is the buyer skilled at buying and integrating?
Selling can be complex and hard to navigate. After all, it isn’t something you will likely do very often. Finding a buyer who has a long track record of successful purchases will make your job as a seller much easier. Also, don’t just take the buyer’s word when you ask about their track record. Ask for an extensive list of references. Checking in with past owners who have worked with your prospective buyer is the best test of all. Confirm the buyer didn’t cherry pick the references. Insist on full transparency. Call and talk to as many previous owners as you can.
3) Are you happy with the buyer’s intentions?
Is your perspective buyer interested in buying your business just so they can clean house and flip it? If so, your employees may not be in the best hands. Or, is your buyer planning to hold your company while they invest in software and growth? If you want your employees to be well taken care of, this is probably your best option. Just like before, call and talk to the buyer’s list of previous sellers and owners. Ask about what has changed and stayed the same since they sold to the prospective buyer.
4) Is the buyer likable and trustworthy?
Getting a feel for this takes time, but trust your gut. You have built something great. Don’t just sell to the highest bidder or the buyer that paints an unreasonably rosy picture. Find a buyer that will follow through and look out for you, your family’s, and your employees’ best interests. Be cautious of buyers who seem too good to be true or guarded. A trustworthy buyer will answer any and all of your questions. Last but certainly not least, this is another thing to check on when you speak with former owners the prospective buyer worked with.
Step 3: Prepare to Sell
Congratulations, you have found a great buyer that matches up with your goals. Now, onto the last step, due diligence. First, if you haven’t already, loop in your Accountant and Lawyer. Gather and organize your financial records. Due diligence is the fastest and smoothest when the buyer’s team and the seller’s team work closely through each step. Set aside time each week to devote to your due diligence — things will drag on if you don’t.
Follow each of these steps and your business will sell without a hitch. After all, thousands of businesses are bought and sold each year. It all comes down to finding the right buyer who can help guide you along.