Most company owners probably don't want to sell their business right now -- but they want to know they could. That's the theory behind The Sellability Score, an online tool developed by author and serial entrepreneur John Warrillow. The Sellability Score - created based on market research with business owners and mergers and acquisitions professionals -- is a free, 30-question self-assessment that helps business owners determine how salable their company actually is.
"Knowing you could sell allows you to sleep well at night," said Warrillow, the author of Built to Sell: Creating a Business That Can Thrive Without You. "You know you're building an asset that has value and could fund your retirement, let you travel, or whatever you're passionate about."
So what makes for a business that other companies would want to acquire? Warrillow gives a sneak preview of four top criteria.
Let's say your Sellability Score is top-notch and you're ready to move -- what next? Warrillow advised most business owners to work with an adviser or broker to help sell their company, because "their job is to create competitive tension, get multiple bidders, and run the process for you." The fees can be steep: For a business with less than $1 million in sales per year, Warrillow estimated that brokers may charge 10-12 percent, and a mergers and acquisitions professional may charge four percent to five percent for a deal in the $5 million to $50 million range. But they help you avoid "the classic mistakes that business owners make in selling their company," such as focusing so much on the sale that revenue actually slips and the value of the company diminishes. Said Warrillow, "Let them run the process so you can run your business."
Want to learn more? Warrillow offers workshops and more information on his Built to Sell website.
Have you sold your company -- or do you want to? What pointers do you have to share?
This post originally appeared on Forbes.com.
Dorie Clark is CEO of Clark Strategic Communications and the author of 'Reinventing You: Define Your Brand, Imagine Your Future' (Harvard Business Review Press, 2013). She is a strategy consultant who has worked with clients including Google, Yale University and the Ford Foundation. Listen to her podcasts or follow her on Twitter.