Posted on Apr 04, 2023
Whether you are simply looking for opportunities to sell or you have been approached by an investor, we look at what you should think about before selling a start-up business.
Think about your goals for the business and what you set out to achieve. Try not to look at just your current state, consider both the past and future. Are you confident that you are what your business needs to get it to where it needs to be? Or is it at a stage where to grow it needs corporate backing? You have spent a lot of time and money getting your business to where it is today, so consider if you are truly ready to hand over the mantle.
Many start-up business owners need some financial support along the way which means they may have a stake in your company or are owed money in a certain timescale. Similarly, plenty of businesses are set up by multiple founders which means they all need to be made aware of your plans. If you are looking to sell your share of the business, be honest and upfront with all parties involved.
Think about your current customer base. Why do they use your business over the competition? Is it because of your attention to detail, your close client relationships, your unique service offering or something else? Consider if your business would change dramatically without your input. If so, is there a possibility your customers would start to look elsewhere? While this may not affect you after you have completed the sale, if you have close personal ties to your business, it may be a point to consider.
Before you accept an offer, you need to assess the figures. Think about your stake in the business, how much you have earned to date and your forecast earnings over the next five years. Is what you are being offered realistic? If you can make more by continuing to grow your business yourself, it may be worth holding on a while longer.
Consider your next steps, what are you going to do after you have sold your business? Life is not always easy after selling a business, even if you have plenty of capital to live on. You have spent years giving everything you can to your business and seeing that end can shake your lifestyle dramatically.
Whether you are well into running your start-up or just getting going, it’s important to get your insurance on the right track. At Watkin Davies Insurance Consultants Ltd, we specialise in arranging tailored Commercial Insurance for businesses. We will consider the insurable risks that affect you and mitigate these with the right grouping of standard and add-on policy features.
To find out more, get in touch on 02920 626 226 or email insurance@watkindavies.com
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