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E.B. Woodward Shares Their Do's and Don'ts for Successfully Selling Your Business

LOUISVILLE, KY / ACCESSWIRE / November 16, 2021 /Erin Woodward is no stranger to successfully building, growing, and exiting ventures. She recently sold her second and third startups, and her experience has given her some key insights for small and mid-sized business owners trying to develop their own exit strategies.

Today, Woodward is helping the businesses transition to their new ownership while already pursuing ideas for her fourth and fifth startups. On the topic of starting even more businesses, she says, "Once you realize you can do it, it becomes addictive, and you don't stop," although she does plan to take some time to reconnect with nature and spend quality time with family and friends.

Personally, Woodward focuses on more than just the dollars and cents of these deals, saying, "I care about the metrics too, but not at the expense of the people." She initially rejected offers from private equity firms for her startups, instead finding buyers truly interested in continuing to grow the businesses she founded.

Choosing the Right Time to Sell Your Business

Timing is a major factor in essentially any kind of deal, but Woodward stresses that business owners can never really be sure when the right time to sell is. In her own experience, Woodward has generally sold when she believes there's still potential for growth but that the business had gone as far as she wanted to take it.

In the case of her two aesthetics businesses, selling had always been a part of the plan. Woodward had set out with the goal of selling after around five years, and she followed through with that plan. While there are many factors that go into the decision to sell, planning ahead can help provide much-needed clarity in this area. Don't be in a rush, not having a need to sell is far more attractive to a buyer. It's okay to be picky and turn down deals as well.

Working Through the Sales Process

So, how exactly is selling your business going to work? In general, startups are going to be purchased by larger companies looking to expand and integrate or private equity firms or investor groups looking for profitable investments. Woodward says that private equity groups sometimes look to acquire assets at significant discounts, but not always, and each deal is case specific.

Price is a major sticking point when it comes to most business sales. Just how much is your business worth? You can roughly calculate your company's sale price based on a few metrics.

For service-based companies, valuation can range from 1 to 2 times the annual free cash flow, with hybrid companies ranging up to 3 times or more. Companies that sell products are valued between 2 and 10 times the annual revenue, based on the specific market and industry. Of course, highly innovative product companies have been known to sell for much, much more.

Of course, you can ask any price you'd like for your business, but you'll have to demonstrate that value to potential buyers to make the sale. There are going to be several rounds of due diligence where you open your books up to attorneys, CPAs, lenders, brokers, and the buyer themselves.

Generally, the lenders providing funding for the buyer to purchase your business will have very strict standards for the documentation they'll need to see. This will likely include three years of bank statements, tax returns, and profit and loss statements.

Moving Forward After Your Sale

Once you've listed your business for sale, you don't have any guarantee when or if it's going to sell, and even though you're in limbo, it's business as usual until the right fit comes along. Planning for every contingency is essential when sales could take three months or three years to pull off. Once you get an agreeable offer, the process speeds up considerably, and you'll likely see the deal close within 2 to 4 months. "It's a bit of an emotional roller coaster throughout the process, as you're saying goodbye to something you built and love, your gut takes a bit of a hit, but it's mixed emotion because you're also celebrating - financially, mentally, emotionally - something you created out of nothing, that is now valuable to others, and you reap the fruit of your brainchild." You're going to be dealing with capital gains and legalese, so working with your CPA and attorney throughout the process is important. Having a plan for reinvestment of the net proceeds is paramount.

Erin Woodward also stresses the importance of planning for what happens after selling your business. Are you going to catch some much-needed relaxation or move right onto your next project? Selling your business can be a stressful process, so you deserve to reap the benefits the way you want to.

Contact:

Company Name: E.B. Woodward
Contact Person: Erin Woodward
Website Link: https://ebwoodward.com/
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SOURCE: E.B. Woodward



View source version on accesswire.com:
https://www.accesswire.com/673085/EB-Woodward-Shares-Their-Dos-and-Donts-for-Successfully-Selling-Your-Business