Most startup owners do not set out so they can sell their business at the finish line, but they often feel the need to, eventually, either because they no longer have the means to sustain it, they consider it much more profitable to sell or they want to chase other dreams or develop new ideas.
Selling a startup is a big step and one many business owners consider from time to time. Understanding how best to go about the process, however, is essential. Here are helpful tips.
1. Do a SWOT analysis. SWOT analysis simply entails defining strengths, weaknesses, opportunities and threats of your startup. As a means of preparing you for discussions with prospective buyers, the SWOT analysis is an essential one that gets you to know all there is to know about the business and the strategies you have employed over time so that you are able to respond thoughtfully when potential buyers throw questions at you.
2. Pay for audits. Before you sell, you have to ensure your house is in order financially. Most buyers are wary of financial statements that have not been reviewed or audited by an external firm. To quell all doubts that may possibly dissuade potential buyers, ensure you have at least three years of audited financials prior to the point of sale.
3. Know the real value of your startup. Considering the amount of time and effort put into building a business, it is reasonable that a majority of startup owners looking to sell tend to overvalue. But value is not always proportional to effort. Placing a value much higher than the real value of the startup can make it very hard to sell. So, before you take your business to the market, ensure you are realistic about how much your company is truly worth. Offer it at a price that is not only fair to you but also accurately represents the true value of the business.
4. Have a plan in place for the next step. You do not want to make a sale and be left on the sidelines. Before you sell, make sure you have a solid plan in place for the future. Consider the next best steps to take and plan towards it. It could be starting a different business, devoting your life to doing charity work, teaching others or any other form of community development. Ensure it is something. Having a future plan also eliminates the fear of the unknown, improving your chances of going through with the sale.
Source: Jumia Travel