Having a player mindset when selling a business can be a real gamechanger. The goal with this approach is to steer clear from coming across as desperate or highly motivated to sell. Instead, a seller who embraces a player mindset operates from a position of strength. It’s all about realizing you have something of value and then realistically taking steps to move forward.

Keep Operations in Check

It is vital that you, as a seller, realize that your number one responsibility is to your business. You must keep normal hours of operation and activities should proceed as normal. This will ensure that everything at your business is operating at peak levels. Inventories must be maintained, team members must stay on board, and you should continue moving forward as though there is no sale on the horizon. After all, business deals fall apart every single day.

Stay Realistic 

Being a player doesn’t mean being unrealistic or greedy when it comes to pricing. While you, and your business broker or M&A advisor, will want the very best price for your business, it is essential that you remain realistic about the value of your business. Remember that like any asset, your business is not worth what you think it is worth. Instead, it is worth what someone is willing to pay for it. If you are like most business owners, you have a great deal of sweat equity built up in your business, and that means your emotions are likely involved. Having an impartial expert evaluate your business and reach a realistic price is in your best interests.

Maintain Confidentiality

A key part of achieving a successful sale is to maintain confidentiality. Experienced brokerage professionals always use confidentiality agreements because they work to protect their clients. One slip up in the realm of confidentiality can destroy a potentially great deal and even damage your business. Don’t work with any business broker that doesn’t utilize the powerful tool that is the confidentiality agreement.

Get the Upper Hand 

Being a player instead of a seller means that you act from a position of strength. Circumstances often dictate whether or not a seller is in a position to act from a position of strength. For this reason, you’ll want to sell when you are not forced to do so for personal or financial reasons. You’ll want to prepare your business for sale when you are not under any pressing stress to sell. Investing the time to clean up your balance sheet, address any environmental or leasing issues, assemble key documents, settle litigation and other key steps, should be done long before you wish to sell. In short, you want to be ready to sell whenever you feel like doing so.

Selling a business is a complicated process with many moving parts. Quite often, it is the structure of the deal that is more important than the price. Maintaining momentum is often the most important part of achieving a successful sale, for deals that drag on for an extended period of time are more likely to fall apart. 

As a player selling from a position of strength and not a seller who is in reactivity mode and must sell immediately, you set yourself up to be firm but also utilize flexible thinking. Being flexible and realizing when to bend can make all the difference between a deal happening and a deal falling apart. 

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At some point, the odds are exceptionally high that you’ll need to sell your business. Today, fewer businesses are being passed on to the next generation, increasing the likelihood that you will be selling yours eventually. Regardless of your business’ stage of life, the time to prepare for its eventual sale is now.

Many believe that the most effective approach to selling a business is to avoid adopting a purely “selling” mindset and instead aim to position the business to be purchased. Let’s take a look at a historical example. In Cary Reich’s 1996 book “The Life of Nelson Rockefeller”, an insightful anecdote illustrates this point. 

In negotiations over Rockefeller’s Mesabi iron ore properties with J.P. Morgan, John D. Rockefeller, Jr. astutely replied to Morgan’s team asking for a price with, “I think there must be some mistake. I did not come here to sell. I understand you wish to buy.” Despite Morgan eventually purchasing the properties, the price was set significantly higher.

The takeaway from the Morgan-Rockefeller interaction is that adopting a “player” mindset can be crucial in achieving success in negotiations and business deals. Never neglect to realize that your mindset going into a negotiation will likely influence its final outcome. 

One of the first realities any seller must acknowledge is that selling a business can be emotionally draining. The process demands significant time and thought, and many business owners inadvertently harm the value of their business by neglecting day-to-day operations during the sales process. 

It’s advisable to delegate the heavy lifting of selling your business to experts. Most business owners have never sold a business before, and even if they have, they likely lack expertise in this specialized field. When striving for optimal results in any endeavor, seeking the expertise of professionals is always beneficial. A business broker or M&A advisor, for instance, can manage every aspect of the sale—from evaluating offers and structuring deals to vetting serious buyers.

As a business owner, your primary focus should remain on running your business successfully until the day it is sold. This approach ensures that your business maintains its value and appeal to potential buyers throughout the sales process.

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LinkedIn is a crucial platform for professionals serious about business. Its versatility allows business owners to harness its potential in numerous ways. By implementing the following tips, you can enhance your LinkedIn profile to attract more leads and expand your network rapidly.

1. Send Connection Requests

Initiate by actively sending connection requests. Most LinkedIn users understand its networking purpose, making it easier to connect with potential clients, CPAs, attorneys, and other influential individuals. Use LinkedIn’s search tool to identify and invite relevant contacts. The platform’s improved connections recommendation feature is invaluable for expanding your network strategically.

2. Build Out Your Profile

Before diving into connections, ensure your profile is comprehensive and up-to-date. Include a professional photograph or yourself, contact information, and a clear summary detailing who you are, what you do, and how you and your business can add value. 

Focus on conveying essential information succinctly to maintain interest and engagement. Users are unlikely to read long paragraphs about you and your opinions. That’s why experts suggest focusing on conveying key thoughts and carefully shaping what information is presented on your LinkedIn page.

3. Be Involved

Join groups and engage in discussions to maximize your LinkedIn experience. Look for groups relevant to your regional market or industry. Contribute valuable insights and information to establish yourself as a knowledgeable professional, attracting more connections organically.

4. Update Regularly

Regularly post new content on LinkedIn to stay visible and engage your connections. Share blog posts, professional tips, relevant articles, or updates about your listings. Ensure all your posts provide value and insight, demonstrating your expertise and dedication to your field.

5. Stay in Touch

Maintain relationships by staying in touch with your connections. Regularly reach out to inquire about their well-being and offer assistance if needed. Cultivating these connections over time can lead to unexpected opportunities and strengthen your professional network.

LinkedIn is a powerful tool for expanding your business network when used effectively. By implementing these strategies consistently, you can leverage LinkedIn to its full potential.

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Maintaining confidentiality should be placed at the top of your “to-do” list when selling a business. The tremendous importance of maintaining confidentiality is difficult to overstate and stands as one of the key reasons that any seller should opt to work with a business broker or M&A advisor. Every seller should remember that a breach in confidentiality can quickly kill a deal, and for many different reasons.

To be blunt, a breach in confidentiality is dangerous for your business. Such a breach can cause suppliers, vendors, key customers or clients, as well as employees and management, to become concerned or even alarmed. A change in the ownership of a business can translate into major changes in how it operates. 

Vendors and suppliers can worry about disruptions, and employees and management may become concerned for their jobs or positions. In turn, disruptions may take place, such as key team members finding new positions, which could make a prospective buyer nervous. These disruptions could make it more challenging to successfully sell your business.

While a breach of confidentiality may lead to a loss of confidence or concern among vendors, suppliers, employees, and management, that is only the beginning of the problems that a breach may cause. A breach in confidentiality could mean that your competition learns that your business is going to be sold. Your competitors may seize on this opportunity and try to steal your clients or customers. The end result is that your business could experience a sudden and sharp decrease in revenue as key customers go elsewhere. The loss of revenue and customers will make your business less attractive to any potential buyer. In this way, a breach of confidentiality could dramatically help your competitors grab market share and do so at your expense.

Even if all of your employees and management stay and all of your vendors, suppliers, and key customers move forward with business as usual, there is still another issue. Prospective buyers who learn that there was a breach of confidentiality may simply walk away from the deal as they are worried about potential negative outcomes due to the breach in the future.

It can be challenging to maintain confidentiality, and yet, it is remarkably important. Brokerage professionals are experts in maintaining confidentiality. Any owner looking to sell their business will be well-served by taking advantage of all that a business broker has to offer.

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Negotiations can often be both perplexing and delicate. A simple misstep can jeopardize what could have been a great deal. One key but often overlooked tool in any negotiation is to pause and consider the wants, needs, and desires of the other party. Contemplating the ideal outcome for them can work wonders.

Understanding what motivates a buyer is crucial for a successful outcome. At the beginning of the sales process, it’s unlikely that you’ll know what your buyer really wants. This lack of knowledge about their desires, values, and standards presents a challenge, especially in the initial stages. Essentially, you’re operating with limited key information at the negotiation’s onset, necessitating caution.

One effective approach is to emphasize the strong financials of the business. Emphasizing a business’s sound financial footing is generally well-received. Whether a buyer is a former corporate executive or from another background, highlighting a strong return on investment (ROI) is prudent. Additionally, most buyers prefer a business that won’t disrupt their current lifestyle.

Understanding what a buyer expects from you post-sale is crucial. Some may want the previous owner available to assist during the transition period, while others, particularly those familiar with your industry, may require less post-sale involvement. Knowing their expectations can help you adapt your approach accordingly. Some buyers may seek your expertise, while others have their own ideas for running the business. Understanding their direction can aid negotiations.

Emotions play a significant role in business transactions. Buyers are often excited about the prospect of purchasing a business, especially in the initial stages. However, it’s essential to maintain a realistic and grounded presentation and approach. Overselling the business can backfire, as it can lead to later disillusionment from the buyer.

Sellers should consistently consider what buyers want. While all buyers seek a successful business, their motivations and perspectives can vary widely. Tailoring your approach to each buyer and understanding their motivations can lead to positive outcomes. With their extensive experience, business brokers and M&A advisors can provide valuable insights into buyer motivation.

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Many sellers are surprised to learn that seller financing is very common. In fact, sellers should realize that there is a good chance that in order to sell their business, they will have to consider offering seller financing. 

What is Seller Financing?

Seller financing essentially occurs when the seller provides a loan to cover some part of the purchase price. It is common for the rest of the purchase price to be covered by a combination of a down payment and additional financing sources. 

Benefits of This Approach

At the end of the day, seller financing means that the seller serves as sort of a bank for the buyer. While many sellers may not like this prospect, seller financing can offer many benefits. Two key benefits are that potential difficulties of working with a real bank are bypassed, and sellers often enjoy a higher final sale price.

Most business brokers strongly encourage sellers to consider seller financing. One reason brokerage professionals favor the seller financing option is that it helps stimulate buyer interest. A seller who believes in their business enough to offer seller financing can expect buyers to take notice and respond. Sellers with confidence in their business can expect buyers to be eager to learn more.

Due Diligence is Essential

Sellers who choose to offer seller financing will still have to perform all necessary due diligence. Working with a bank does have its benefits; for example, a bank will check a potential buyer’s financial statements as well as their credit reports and more. 

Without the involvement of a bank, the seller is responsible for performing due diligence and checking that the buyer has a low risk of default. While seller financing opens up many possibilities for sellers, it is important that sellers also realize that this route comes with additional responsibilities.

Safeguards to Utilize

There are a variety of safeguards that sellers can use to help protect themselves when offering seller financing, and once again, brokerage professionals can be invaluable guides in this regard. Contracts often allow for the seller to take back the business within a 30-to-60-day window if financing fails. Another helpful clause for businesses centered on inventory is that the new owners are required to maintain a predetermined level of inventory during the payment period.

Thanks to seller financing, both buyers and sellers can benefit in a range of ways. Sellers who opt for seller financing usually discover that they receive a good deal of attention from buyers. Buyers enjoy greater financing flexibility and have a very clear indicator that the seller has confidence in the business. While seller financing does come with a good deal of paperwork, it is an option that buyers and sellers alike should consider.

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Everyone loves recurring revenue and for good reason. When buyers see recurring revenue, they instantly know that a business is stable, has positive cash flow, and, importantly, has room for potential future growth.

There is no way around the fact that buyers want a business to be predictable. In short, buyers want to see consistency and stability at every level. Recurring revenue means that a prospective buyer can be confident that they will see income from the first day they take over the business. There is a powerful psychological aspect to recurring revenue that sellers should keep in mind, as they put themselves in the buyer’s shoes. 

When a buyer sees that there is recurring revenue, they know that even if they are unable to develop the business as soon as they take over, there will be positive cash flow. Buying a business is a big decision, and recurring revenue can take some of the fear out of the equation.

Recurring revenue also serves to strongly indicate to buyers that your business offers goods and services that are consistently in demand. Any seller that wants to convince a buyer that their business is worth the asking price should focus on cultivating recurring revenue opportunities. There is nothing quite like recurring revenue to calm nerves and convince buyers that a business is worth a serious look.

Sellers should strive to have a business that has strong annual recurring revenue (ARR). ARR is a metric that measures the money coming in annually.  Once your business has a strong ARR, don’t be shy about emphasizing that fact to buyers. A healthy number serves as a truly powerful indicator of your company’s current and future health and potential. 

When your business displays strong recurring revenue, it points to the fact that your business is doing many things correctly. It shows that your business is able to consistently serve its customers well enough that they return again and again. This fact indicates that both your goods and services and your management and team members are performing optimally.

Summed up another way, recurring revenue is a quick and easy way for potential buyers to gain insight into the value of your company. Any seller looking to optimally showcase their ARR, or looking for ways to boost their recurring revenue, should consider working with a business broker or M&A advisor. Brokerage professionals understand all the different variables involved in helping prepare a business to be sold.

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