Choosing the right time and method for selling your company can appear to be more complicated than it actually is, particularly when you lack the ability larger corporations have to employ a team of professionals to do it all.
When your business is part of a niche industry such as t-shirt or screen printing, it may appear more difficult to find information relative to your target buyers.
These five golden rules will provide guidance on what steps you should take to sell your printing business.
1) Show why your business is unique
Never underestimate the power of recognizing the Unique Selling Point (or, USP) of your business. Any buyer of a printing business will be interested in the financial history, the volume of business and the type of printing equipment that is used. Therefore it is up to you to show them what makes your company stand out from other printing businesses. Highlight factors that emphasize the businesses’ potential and its longevity. Whether it’s positive client feedback, a good relationship with suppliers or the amount of repeat business, show potential buyers why they should consider YOUR listing and you will attract market interest.
2) Be realistic about value
It is tempting to offer your business for sale at a higher asking price, particularly if competitors are few at the time you're selling. However, you must remember that most buyers aren't foolish, they will know if your asking price is excessive, and could be deterred. That being said, it's essential that you don't under-price your business either, which smaller business owners often fall victim of, particularly when hoping for a quick sale. Take the time to analyze your company's profit, expenses, and potential and compare these with an overview of the industry in general. Additionally if you find out printing industry intake for the past six months you can set a price that’s neither foolhardy nor yielding.
3) Have ALL information ready BEFORE listing
You may be confident about your profit margins and profit forecast, but serious buyers will want to scrutinize records and numbers to back it up, therefore you need to collect all the required information, no matter how seemingly inconsequential, before you place your company on the market. This includes records of inventory, expenses, customer demographics, age of equipment, production capabilities, blueprints of the print shop space (if you have it) and a 12-month history of the turnover and all debt that your company may have. Even the smallest details may be important to potential buyers. And don’t delay in supplying requested information, because if there's a delay in receiving the necessary information, buyers could be tempted to look elsewhere.
4) Don’t be afraid to hire a professional
The entire selling process can be a daunting task, particularly for first timers, which is why many choose to use a business broker to assist with the sale. Legitimate professionals make their living out of valuing different companies, finding a gap in the market and negotiating the right price. Using a professional will give you confidence in the selling process. And if a rookie mistake could result in an ultimate lack of interest from buyers, a business broker’s fee is a small price to pay for avoiding this trauma.
5) Remember, negotiation is an art not a science
Once your figures are finalized and your listing is public, avoid falling into the trap of succumbing to the will of an unreasonable buyer simply because they’ve shown an interest. The seasoned buyer may tempt you to settle on a price they deem ‘more reasonable’, which could be much lower than your initial asking price. Negotiation is an art and it takes time, you will want to find out the maximum figure a buyer is willing to pay and remind them of your company’s USP, (as mentioned in 1), above) which is what attracted them in the first place. Remain confident of the company’s value, but do consider some concessions that you would be willing to make. Also take the time to speak to a trusted advisor or broker if you are unsure of your negotiating position (as mentioned in point 4). Reaching the perfect goal will inevitably be time consuming, so don’t give up.
Follow these steps and you will be able to sell your printing business with ease, at a figure you are pleased with, without surrendering to the will of time wasters or buyer tactics.
ASPA Staff and others