Business owners sell for many reasons. For some, a sale is the natural conclusion of a successful career. For others, it’s motivated by a crisis, an opportunity, or a sudden change. The reason for selling the business can play a very important role in the sale itself. Business sales are strategic undertakings, so your motivations will affect the strategy and its outcome.

You must begin the process by understanding why you want to sell. Here’s what you need to do and understand as you move through the process.

Define Your Motivation and Goals

Nearly all sellers want the best possible price although this shouldn’t be the only priority. Sale timing, company health, and the impact of the sale should also figure prominently. A seller’s reasons for the exit will affect the relative importance of each factor.

For instance, some sellers seek a fast sale and an immediate departure due to a crisis. They may be more willing to sell to the first buyer, for a modest sale price.

Other sellers are much slower to exit. They don’t urgently need a sale, and may wish to remain involved with the business over the long term. They may simply want some money for retirement, or as compensation for their hard work. These sellers may be willing to work as a consultant, and are often motivated to ensure the company’s prolonged success. They may even finance a portion of the sales price.

Given these different motivations, sellers should know that buyers are also interested in why owners are selling. The answer to that query is a key data point that affects how the buyer structures their offer. Address your motivations early, because they may affect:

• Sale price within the market
• Sale timeline
• Post-sale involvement
• All-cash payoff or seller financing
• Potential disruptions to customers and staff

Identifying your motives and goals can help you define variables that achieve the ideal sale strategy. Your investment banker will draw upon their experience shepherding other deals to completion to educate you about how your goals will affect the strategy and potential outcome.

Address Potential Conflicts

Most sellers discover that at least two of their goals are in conflict. For example, you might seek an immediate all-cash sale for a high price. The market may preclude at least one of these options. Conflicting priorities can undermine a sale. Some of the most common conflicts include:

• Seeking a fast sale at a high price, without seller financing: Unless the business is a true star, a quick sale normally requires a lower price or seller financing. Third-party financing takes time that can slow the process.
• High price and a rapid departure: When sellers plan to leave immediately, it can raise red flags with buyers and trigger a lower offer. Sellers must be prepared to help buyers navigate the transition. However, this conflict doesn’t always occur. Some buyers want to quickly overtake the business and become the leader. In this instance, the two sides’ goals are aligned.
• High price, low disruption to the business: Putting conditions on the sale that prevent disruptions almost by definition drives down the sale price.

Prioritize Your Goals

You can’t have everything. Identifying your most important goals and any potential conflicts helps you identify strategies to resolve these conflicts. Sellers often benefit from a list of ranked priorities that can help them align their sales strategy with their most important goals.

Brokers play a critical role in helping sellers address conflicts to achieve the best sale outcome. In many cases, the best strategy of all is pre-sale planning. With sufficient time, it’s possible to address conflicting priorities and motivations in a way that maximizes value.