The hard work of an entrepreneur, as many discuss, is more than just the word “hard-working” to depict the effort they put into making their empire. As a business owner, there would be times you only have 4 hours of sleep or even less, to sort out the paperwork, the meeting arrangements, the business plans, etc to make sure your business can sustain for another day. All combined make being an entrepreneur no longer about making money for yourself, but rather a dream that you wish to pursue. It’s a dream that is much bigger than the monthly income, the annual leaves, the stable paycheck, etc that you only need to work 8 hours a day to get instead of working 18 hours a day just to waste another 1000 dollars. The journey of entrepreneurship is a rough path full of thorns, leading to a shining day that covers you in fame, money, or even the satisfaction of achievements.
But there is one fact about opening a business people do not usually talk about: Succeed or not, challenges never disappear. And they only get bigger. I have seen thousands of businesses forced to close, which is a sad ending that no one wants to hear. Some did get to the top of the game but ended up losing all because of bad decisions. Others got erased by the market effect, which is the fluctuation of the market that pulls down the business advantages among other competitors. An example of this is the long-lasting lockdown in Vietnam that finally ended, which has forced hundreds of businesses to shut down. The challenges change every time which requires quickly adaption, like an animal trying to adapt to a different environment. If it fails to perform such a task, it will be forever gone.
Even though such a fortunate event may happen to any entrepreneur, we must secure the bag as part of our entrepreneurship mindset. Most at their worst period may lose hope and decide to close their business to avoid any further debts. After considering all the business aspects to conclude, instead of thinking “I should close my business”, you should consider the “I should sell my company” expression. It is a better one, isn’t it? Selling your business does not only help you take back a portion of what you lost, but it also gives you a new pivot to recreate what you once failed.
Today’s article will discuss a couple of basic ideas for selling a business. The writing includes: Why you should sell your company and how to sell your company.
The 4 reasons you should consider selling your company in Vietnam
The risks are out of hand
Risks are unavoidable when you do business. Even at the time, you assume you have carefully taken care of everything from A to Z, unexpected blackholes come up that swallow all the efforts that you put into what you make.
Also, many people assume a business with too many risks will stand no chance to attract buyers. However, it’s an inaccurate assumption. Your company may attract many potential buyers due to the type of services that it provides. Out there on the market, there are a lot of people who bear in their mind the same business concept as you do, but they want to skip through the beginning step to reach the profiting stages. They have the right materials to deal with extensive risks and are willing to take put the problems on their back because of their great ability in dealing with them. Therefore, don’t think about it as a burden on someone else’s shoulders. It’s better to think about it as transferring your business idea to someone with the right resources.
The retirement time has come
It might be time to leave everything behind and start to focus more on your personal life. If that is what you have got in mind, this is the perfect timing to sell your business to someone else.
The benefit of selling your business to aid your retirement plan is out of the question. Either you are planning to buy a house in the countryside or travelling around the world, the money you get from selling your company will make your plan a lot easier to plan out. The money yielded from a successful transaction is usually in big numbers. You will pretty much have an easy life afterwards.
Make sure you make the plan based on the money you get from selling your company. Being a bit short-handed during the retirement period will put you in a difficult situation.
There are many changes that you cannot manage to handle
The business world constantly evolves. As the demands change every year that require businesses to constantly adapt, it may cause many companies to struggle.
In a digital world like today, it is no doubt that businesses that hold top-notch technology will always take the lead in every race they join. It’s a threat to the lifespan of businesses with weaker technological support and traditional business models that do not apply digital solutions to their services.
Being a small fish in a large fish tank of many other big species, the chance you get eaten by them is always high. If you are aware of this matter happening to your company right now, selling your business to someone with the capability in digital innovation is worth considering.
You can use the money from selling the company to pursue something else that you believe will bear the potential to grow further in the future. Normally, a lot of people would suggest running two businesses at the same time as a backup plan. However, this idea is no good. Running solely one business already consumes a lot of time and effort. Unless your first business has reached a stable stage where you can easily let it run by itself, a second-business idea does not seem like a good option.
Another type of change relates to personal living conditions. Health is one example that people often consider when thinking about putting their company on sale. Being an entrepreneur means you constantly run back and forth to sustain the prosperity of your company. Such always comes with severe consequences. You either begin to become weaker or instantly get sick by the overwhelming environment that you are in. If you keep going further in poor health conditions, your work performance and productivity will only get worse. Life will never be happy if your health is forever gone. It is the right moment to take a step back, spend more time on yourself, and enjoy the little things in life.
There will be times when you need money, for example, to travel around the world, afford a new interest, pay your medical bills, etc.
The money you earn from selling your company can aid you significantly in these cases.
A basic guideline to selling your business in Vietnam
Selling a company involves a lot of complicated paperwork. This basic guideline will walk you through a couple of steps you can follow to start your first transaction:
Decide the reasons for the sale
The 4 reasons above are what most people consider when deciding to sell their business. There are certainly just 4 of them. You can slowly think about it to make the right decision.
Make the offer attractive to the buyers
Many business owners usually decide to sell their company because it’s not making any profit. This will likely attract fewer buyers to looker further into the sale description. Therefore, instead of mentioning too much the loss on the front page, make it more about what your business has achieved:
- The increasing profits of previous years
- The consistency
- The strong database
After you have got some people calling you for further details, you can discuss in more detail the risk (if any) and sort things out with them.
Choose the right timing
Planning out your sale 1 – 2 years ahead is important. Selling a company involved complicated procedures. Especially if you are a newbie, planning years ahead is what you must do.
Also, planning a couple of years in advance will help you have some time to improve the performance of the business to attract more potential buyers. You will have time to work on the business structure, the customer base, and the financial records.
Valuate your business
Business valuation is one of the most important steps. A price too high or too low can make it difficult to sell your company. You can hire a business appraiser to help you evaluate the business’s worth. This appraiser will help you with a detailed explanation of the business valuation so that there’s an official document afterwards with real credibility showing its validity on the market.
Finding a broker in Vietnam
A broker helps reduce the workload you have to deal with when sorting out the needed paperwork. However, it comes with a commission when the transaction is successful. It’s usually recommended to sell the company on your own so you can save money.
If this is your first time selling a business, using a broker could be a great idea.
Get your documents done
All the documents related to your business, from financial statements, tax returns, lists of equipment, to the customer database, lease contract must always be ready. As for the financial statements and tax returns, remember to go through with an accountant to review them. You also need to make a copy for all the parties involved.
Finding a buyer
Finding a buyer is the hardest step of all. It usually takes around 6 months to 2 years to find a buyer and get the deal done. Therefore, work as hard as you could to advertise your business.
After seeing the right buyer that you have been looking for, follow these tips to carefully organize your transaction process:
- Never stop at only one potential buyer. Instead, you should go with 2 – 3 buyers at least to maintain potential contacts to keep it going.
- Frequently contact your buyers if there are any updates
- Make sure your buyers are actually “potential”, meaning they are financially capable. Only if they are will you give them all the classified information about your company.
- Always be open to negotiating because your final scale may not be what most people are looking for.
- However, if you believe the price you give matches the company’s worth, stand firm.
- All agreements have to be made in writing.