Selling your business is a large endeavor and it can be difficult to itemize everything that must be accomplished as part of the sale. The best way you can make sure that you are meeting the key requirements when selling a business is to separate your needs from your wants.
A clear way to understand the separation of needs and wants is with an example.
When a buyer couldn't meet the minimum needs, Dr. X moved on
Dr. X (real name omitted) owned a group of acupuncture offices. He was regularly seeing clients who complained of hypertension and heart disease. While the acupuncture he provided could certainly help their ailments, Dr. Gibson soon realized that alcohol was the root of their problems.
Dr. X came up with a medical plan using both acupuncture and herbal medicine to reduce the craving for alcohol in his patients, and thus alleviate their deeper health problems. To test his theory and new system though, he needed money. He made the decision to sell his group of clinics.
Before negotiating with potential buyers, Dr. Gibson had a list of needs. These were things he needed in order to accomplish what he wanted. He had two items on his list. He needed $475,000 to create and test his system, and he needed to own the intellectual property that was the key to his new endeavor.
By knowing exactly what he needed, it made Dr. Gibson's decision-making process much easier. It also allowed him to focus on the important items in the negotiation. If a buyer approached offering to pay his asking price but was also not willing to give Dr. Gibson the intellectual property rights, then Dr. Gibson knew the sale would not work and he could move on to find the right buyer.
Understand your sale needs versus wants
Some example of needs might be:
- Sale price. Do you need to cover your own expenses? Are you looking for enough money to retire?
- Assets included in sale
- What goals must be met before the sale actualizes?
These needs can be differentiated from your wants with the business. Some example of your wants could be:
- The desire to stay on board in some form or capacity
- The continued vision, image or legacy of your company
- The wellbeing of your employees
Of course, depending your viewpoint. A need on our list could be a want and vice versa. The point is: make your own list and prioritize your needs versus wants.
Using a similar method to Dr. Gibson's list of needs and wants, you too can make sense of the negotiations involved in selling your business. Having a clear list of needs that are detailed and specific will help sort through your own needs and wants. By determining exactly what you need, you will be able to achieve what you want.