Editor’s note: This is Miriam V. Gold’s first column for Beauty Store Business. Jean Warshaw will return with her column in our July issue.
Congratulations! You have decided to sell your beauty business. Before you find a buyer, you need to do your homework. Doing so will not only facilitate the sales process, it might very well result in more profit for you. Selling a business is very different than operating one. You need to determine all of the elements of your business that provide value to the business or subtract value from it. Identification of the value enhancing or value destroying aspects of your business will help you to:
- Price your business optimally
- Target the types of buyers that will best meet your objectives for the sale
- Fix problems or manage issues before a buyer gets involved
- Eliminate a buyer’s ability to renegotiate the price late in the process, when you are already committed, because he has discovered an “issue”
- Structure the deal with your tax adviser to maximize your profitability
- Create a level of trust between you and the buyer
Typically, you form a team to conduct this process, which is sometimes referred to as “reverse due diligence.” The earlier a team is formed, the more likely the issues that arise will be addressed in a timely way. For important areas, make sure to use experts. In the long run, they will be cost-effective because they will quickly cull the wheat from the chaff.
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