A manager who is about to sell his company must be prepared to answer a buyer’s questions. Here is a list of the questions that must be prepared.
As a director, one who is preparing to sell his company must develop a business strategy. It is therefore necessary to list the possible questions of a buyer and to answer them.
Selling your business: answering a prospective buyer’s questions
1. Why sell the business?
Whether he has decided to sell his company because of retirement or a change of career, the manager must be transparent to a buyer. Also, if the business is on the decline or facing any difficulty, it will also be necessary to be honest, under penalty of losing all credibility when a financial diagnosis of the company has been established.
2. Is the company healthy and profitable?
If the buyer will determine it with his own tools, the manager who wishes to sell his company must also prepare the arguments in favor of his business. Numerous criteria must be gathered: intellectual property, salary strength, specific skills of the employees, solidity of the suppliers, maturity of the market, etc.
3. What is its market position?
Is the company uniquely positioned? If your products or services are particularly innovative and differentiate you from your competitors, you should promote them to your buyers. Also show that your business processes are strong enough to keep your company in the market after the sale.
4. Does the company have an established customer base?
Whoever wants to sell his company must prove that his customer base is solid and loyal. Less time and energy spent on prospecting increases the value of a company. This is especially true for businesses with a limited number of active customers.
5. What about the lease?
If the business depends on its location, the lease is a critical factor. It is best for the transferring manager to ensure that the lease will be renewed with the new manager. Check the terms, such as personal guarantees or the deposit issue. Ask the landlord what is required for him or her to accept the new executive.
Selling your business: don’t hide anything
Throughout the selling process, a buyer will obviously want to make sure there are no skeletons in the closet. Anticipate complications, be upfront with buyers and respond promptly to their requests. Some of the most common difficulties include legal liabilities, financial issues, human resources and customer service.
To assist you in the transfer of your company, call on Actoria France, a team of professionals specialized in the transfer of companies and dedicated to your project.