When building your startup, there are many elements that will contribute to its success, from the strength of the market to how much credibility you manage to establish. When you feel your financials are in order and you’re ready to sell for a good price, it is worth getting some advice from professionals to prepare for a sale.
Peterson Acquisitions will do a business analysis that will look at your business performance and even give you suggestions on how to improve it. The report you receive will evaluate your sales, cash flow, assets, liquidity and more. It will give you the confidence you need when going into a sale.
Look for a good market
If you create a startup in a booming market, you have the best chance of selling for a good price. When a market is growing exponentially, there is every chance that your startup will sell if you have a good product and a sound customer base.
When you’re looking to sell, there is no doubt that top business brokers have the experience, contacts and understanding of markets to help you prepare, find you qualified buyers and help you get the best deal.
Build credibility in the field
If you want potential buyers to take you and your startup seriously, you have to work on building credibility. You can help to do this by sharing your expertise. Writing blogs, white papers, contributing articles to trade magazines, and being interviewed by experts can help establish your credibility.
Speaking at conventions and tech conferences can also help as you can speak about your product and make more people aware of it.
Network with other founders
By networking with other founders, you may find they have the information you need or you can help them in some way. More importantly, they may have the interest and means to be potential buyers.
Even if they don’t want to buy, they may know other people they feel may have an interest in your product and they are likely to your startup seriously because it’s been recommended by a colleague.
Build up a loyal customer base
You need to build up a healthy, strong and loyal customer base. If you’re relying heavily on one customer, it is usually considered high risk by any potential buyer. It helps to diversify your customer base so that if one falls away, it makes little difference.
Create a positive cash flow cycle
The more working capital an acquiring company has to put into a business, the lower its return equity and the less it will pay for your business. You can create a positive cash flow cycle if you charge upfront for the products or services you’re selling.
Know when it’s time to sell
A big mistake is to sell when your startup is not doing well or to try and sell prematurely. There is plenty of preparation that has to be done in advance of a sale, and if you’re unprepared, you’re unlikely to achieve the sale price you may expect.
You also can’t afford not to keep working on innovation and your growth potential even if you know you want to sell. You will only be able to sell for a significant amount if your product is beneficial to a potential buyer and a sale presents them with a great opportunity.
There will always be a learning curve when you want to sell a startup and it helps to have advice and start planning well ahead of time. This means your startup will be in the best possible shape when the time is right.