A Guide to Selling your SAP consultancy Business
Building an SAP consultancy business is hard work and the decision to sell it can be tough. Whether you are selling your business because you want to venture into something else, retire, or for whatever reason, the process can be complex and overwhelming. The goal is to try and get the best price and the best buyer for your business but that is easier said than done. Well, we have compiled this quick guide with some tips to help you sell your SAP consultancy business.
Define your reasons for selling your business
Every potential buyer will want to know why you are selling your business. Most people sell their businesses because they want to venture into something else, retire, due to illness or death, partnership disputes, or unprofitability to mention but a few. However, some reasons such as unprofitability can indispose potential buyers from buying the business. Thus, before selling your consultancy, ensure that it is attractive to customers. For instance, make sure you have been consistently profitable and that you have a strong customer base.
Tip: Be honest with the position of your business. Don’t go the fraudulent route.
Choose the correct timing
The best time to sell your consultancy is when the customer base and profitability are good. This will ensure that the business runs smoothly even after the sale. Thus, it would be best if you prepared to sell your SAP consultancy early in advance. You will have time to build a strong customer base, improve your business structure, financial records, and make your consultancy profitable to attract buyers.
Determine the value of your consultancy
Valuing your SAP consultancy will help in knowing its true value. It will make it easier to establish a selling price that is neither too high nor too low. Get a professional to carry out a detailed appraisal for your consultancy. Moreover, carry out the valuation process far before you sell. If you find your SAP consultancy value too low, you will have time to increase the value of your consultancy and thus achieve a higher selling price.
Get an intermediary
If you decide to sell the SAP consultancy yourself, well and good, you will have saved money that you could have otherwise used to pay an intermediary. That said, selling a business can be a complex process with a lot of pitfalls involved. According to Stefano Endrizzi, the Founder and CEO of MergersCorp“ M&A International “An experienced intermediary can help smoothen the process of selling your business and save you a lot in the long run, lest you have experience selling. A good intermediary can help you right from preparing the business for sale, finding the buyer right through negotiations to inking the deal”.
Get your paperwork ready
Any potential buyer will want to take a look at your paperwork which includes taxes, financial statements, and contracts. Long before you put your business on for sale, ensure paperwork for the past 3-4 years is in order. Prepare your financial and tax records and let a certified accountant have a look at them. Also, have the updated operating manual for all your machines. Good paperwork makes the business attractive to potential buyers.
Locating the right buyer
Finding the right purchaser for your consultancy can be daunting. According to SCORE, a non-profit association for entrepreneurs and partners of the U. S. Small Business Administration, selling a business can take anywhere between 6 months and two years. Thus, you will need to advertise your consultancy extensively to get the right buyer. Identify and work with 2-3 potential buyers for back-up in case one hesitates to buy the business. Before disclosing your business information to a potential buyer, ensure that the buyer is in a position to pay for the consultancy.
Moreover, do not be rigid on the asking price, give room for negotiation. Have your intermediary help you in fair negotiation and reach an agreement with the buyer. Let all the agreements be on writing; the potential buyer should sign the purchase agreement and the confidentiality agreement. If there are conditions that either you or the buyer should meet before signing the bill of sale, make use of an escrow.
Be smart with your sale’s profit
You are good to go and hopefully, you will get the best deal for your business. Now, before handling the profit from your SAP consultancy sale, you need to take time and create your financial goals. Have a professional in finance guide you through the best ventures you can invest your money in if you don’t have the best experience. You can also seek guidance on how to save your money.
Selling a business is overwhelming, but with the right support, you will overcome the challenges. Plan on selling your SAP consultancy early in advance. You will have time to keep it in good shape by adding its value and gathering all the necessary documents. It is best to work with a skilled intermediary to help you through the process. Remember to use your profits wisely once you get the best deal!