The thought of selling your business to a competitor can seem daunting. However, it is not uncommon and certainly possible. There are six major tips for successfully doing so:
An NDA should be signed before any confidential information or trade secrets become known on either side- this includes having the buyer work through an intermediary during discussions until they sign their own contract with you at which point both parties will need access to one another’s sensitive data.
The best advice is to hire a broker. An experienced intermediary, such as Transworld Business Advisors, can help navigate this difficult sale fraught with danger of falling into the hands of your competitors. You will need an attorney by your side at all times to make sure that you have the proper protections and structures in place throughout this process.
Determining your business’s value
The first step to selling your company is finding out how much it’s worth. Once you have done this, then you can decide on a price that will be both competitive and within market standards. When trying to sell the company to someone who competes with us directly, they’ll know what fair pricing looks like – so in all likelihood they won’t be our best chance of making any money back from them because ultimately their needs are likely different than ours.
The old adage goes that if you can’t beat ’em, join them. It’s easier to sell your product or service through a competitor than it is with another company with no vested interest in what happens when the sale gets made. If things go well and both parties make money off of this deal then naturally they’ll be on better terms because one will owe something to the other for making some extra cash from their hard work!
This can be a really hard decision, but don’t be afraid to ask questions. There’s no point in going into something where you’re not sure about the outcome and it could end up being pretty bad for your business if you do sign on with them without knowing what they have planned for you or why they want to buy your company. I mean, until we actually get all of that out in the open there’s always just some room left over for doubt so feel free to keep asking!
The true joy of entrepreneurship lies within creating things from scratch- developing new ideas and products- which means before entering any agreement make sure that both parties are clear as possible on their goals: who wants what? What does each party hope will happen
You need to keep your eyes on the ball. While any deal and its corresponding negotiations can take up much of one’s time, do not lose sight of what is critically important – namely, your business. A company only has as much value as its most recent earnings which means it requires attention in order for revenue to continue growing.
