How SahiGST Grew and Then Got Acquired by Vayana Network

“All Lasting Business is Built on Great Partnership.”

When it comes to strategic acquisitions, Indian Fintech industry is perhaps one of the most vibrant and active. Ever since demonetization, we have rapidly shifted gears towards comprehensively digitized and tech-enabled finance. The next overhaul came in July 2017, when GST was launched across the country – once again this time, our Fintech innovators stole the show. Earlier this year, SahiGST – a game-changing tech startup that revolutionized GST filing and compliance – was acquired by Pune based Vayana Network. This is the story of their inspirational journey, brought to you by Indiabizforsale.com in conversation with Annkur Agarwal – co-founder of SahiGST & Pricebaba.

Inception: How It All Started

Back in 2002, when Annkur Agarwal started out as an online retailer, he got the taste of the exciting world of entrepreneurship for the first time, and since then there has been no looking back. The startup wave in India picked up around 2010, and 2 years later the technology bug bit Annkur as well. With a founding team of 4 core members, Pricebaba was born – an intelligence product research engine that helps consumers find the right product at the right price from the right seller.

Four years went by, with Pricebaba going strong for the most of it. Meanwhile, in 2016, the Government announced GST rollout plans for 2018, inviting technopreneurs to build the Google of GST with licensed APIs. It is around this time that Dinesh Tejwani – one of the investors in Pricebaba – reached out to the cofounders with the idea of SahiGST – a cloud based comprehensive solution for businesses for simplified GST filing and hassle-free compliance management. The market opportunity seemed lucrative, and building such a challenging product was any coder’s dream. Thus, with a lean team of 6 – i.e. 5 co founders (Annkur and 3 others from Pricebaba and investor Dinesh Tejwani) along with a domain consultant in GST, SahiGST kickstarted in December 2016. After the first few months of product conceptualization, the team strength grew to 15, focusing primarily on product development and testing.

Product Launch and Challenges

For Annkur and team, this was not a smooth ride – and nor did they expect it to be. Like any other major economic overhaul, GST brought with it intense legal and political volatility that translated into chaotic product development. To start with, the various provisions, categories, rates, and procedures underwent massive changes in the months leading up to the rollout – which were also incidentally the peak months for product development. The cofounders at SahiGST had already been forewarned of such a possibility by their domain expert, but even so it was a roller-coaster ride to keep up with the ever changing provisions. After months of burning midnight oil, when they finally started eying April-March for a grand launch of SahiGST, the rollout was again pushed back to July 2018, and more changes were ushered in – though mostly incremental this time.

Annkur shares with us how his team’s decision to bootstrap SahiGST instead of seeking external investment proved to be critical to survival in hindsight. As he writes in his blog, “Given the volatility around GST & its implementation, we knew that… deploying any funds (specially borrowed) in an aggressive manner might be a gamble… We could build a great product with two technical co-founders & three founders focussed on marketing, sales and support. So…[we] ran a lean ship instead of expanding prematurely. In hindsight, that went just perfect, had we invested too heavily, we would have burnt a lot of money in vain…

Indeed, this master plan worked perfectly. Undeterred by the long gestation period, when GST was finally launched in July 2017, SahiGST became the first player using Govt. API to go live and turned cash positive within 2 months of launch!

Partnership with Vayana Network

The acquisition of SahiGST by Vayana Network goes way back to the partnership between the two entities during its early days.

To begin with, let us first understand how the GST implementation works in simple terms. The first key player is the GSTN – the Goods and Services Tax Network (GSTN) is a non-profit, public private partnership company. Its primary purpose is to provide IT infrastructure and services to central and state governments, taxpayers and other stakeholders, thereby facilitating the implementation of the Goods and Services Tax (GST). The next key components are GSP and ASP. In a nutshell, taxpayers interact with the GST filing system through secure GST System APIs that are developed and serviced by third parties called GST Suvidha Provider (GSP) and Application Service Providers (ASP). ASPs take taxpayers’ raw data on sales and purchases to arrive at the net GST returns, which are then filed via the GSP. ASPs, therefore, act as the link between the taxpayers and the GSPs.

Vayana is a pureplay GSP which enabled SahiGST (an ASP), and thus a partnership blossomed. What started out as a sheer tech-based symbiosis, soon transformed into a partnership of mutual understanding and shared vision. As the working relationship continued to grow in strength and purpose, a new pattern emerged in the market opportunity for SahiGST.

Annkur and team had started out with the notion that they would be servicing a fragmented market mostly consisting of SMEs and small CA firms. However, within a short span of time, larger corporate clients looking for enterprise and conglomerate level solutions flocked to the product. They realized that while this was a pleasant and welcome surprise, to service and compete in this larger and more competitive market space required much deeper pockets, bigger and stronger team and more energy to be directed away from Pricebaba into SahiGST. The team began to wonder whether seeking strategic sale to the right buyer was the best way to go. Opportunity arrived at their door when their robust relationship with Vayana Network paved the way for an acquisition deal to emerge on the table.

Acquisition: How It Happened

Annkur had already anticipated the possibility of a deal when the CTO and CEO of Vayana Network reached out to him, stating his intent to pursue an acquisition – interestingly, the two of them had already met each other 9 years earlier at an event in Pune. Annkur chuckles, “It is amazing how life comes circling back to you – one should never underestimate the value of network and relationships.

Things moved quickly from there in the first few months, since Vayana was already familiar with the business and technology details of SahiGST. Even so, Vayana conducted a thorough and meticulous due diligence with the help of seasoned professionals. On the part of SahiGST, Dinesh Tejwani spearheaded the deal, with the former’s extensive experience in deal-making coming to much aid. After a reasonable amount of negotiation, the valuation figure was finally pegged close to the first figure expected by SahiGSt team in the beginning of the deal. He recalls with some frustration the speed breaker that they reached during deal structuring, when lawyers were doing their thing – with elaborate grinding on each and every aspect of business, technology, IP, employee, customer, transition and so on. However, he shares his appreciation for decision makers at Vayana who expedited the deal and respected the timelines that he had quoted to them. Since the licenses of SahiGST users was due for renewal in April, the deal closed at the right time for a transition to Vayana being announced to customers & partners.

The transition too, took place in a highly cooperative spirit. Annkur and his team committed to support the transition process till July, 2018, although it was wrapped up much earlier. Interestingly, in a different turn of events, one of the co-founders exited Pricebaba team and joined Vayana to lead and manage the acquired SahiGST platform hands-on. With SahiGST off the table, Annkur and others now hope to focus full-time on Pricebaba and take it to new heights.

Key Takeaways

  1. Opportunities don’t last forever – be quick in identifying a market opportunity before it’s gone!
  2. Stay lean and focused – it will help you survive during chaotic times
  3. Nurture relationships with patience – the right partnerships can bring you extraordinary rewards
  4. Learn to let go – transition the business into able hands when it’s time.

Liked this post? Don’t forget to share it in your network. Stay tuned to our blog to read more such inspiring stories! Find the interesting business opportunity or get valuation of your business.

Avoid These 3 Mistakes When Selling Your Business

“Win or Learn – That Way You Never Lose”

If you are planning to sell your business, and especially if this is your first time, you must be getting a little overwhelmed with all the advice you receive from all corners. Are you wondering if there are any common mistakes that you can avoid? You are right. We have worked with thousands of business owners over the last 5 years and in this post, we share with you the 3 most common mistakes most business owners make when selling a business, and how to avoid them.

  • Not Accounting for Sale Preparation: Even if you are a pro when it comes to selling your products and services, selling your business is not nearly the same and requires extensive preparation, commitment and resources. So, don’t rush into this. Start preparing from day 1 when you decide to sell your business. Depending on the nature and condition of your business, you would need anywhere as the bare minimum time for effective sale preparation up to as much as a couple of years. We have seen business owners being forced to lose clients, accept a lower valuation, lose control of business and go through unwanted frustration –simply because they didn’t give themselves enough time. Our post here tells you how to prepare your business for sale. This preparation includes creation of second line management and delegation of important responsibilities, establishing and consolidating systems, policies and structures, sorting out financial and other documents / records, creating mechanisms to manage existing clients without disrupting long-term contracts, and so on. Then comes the second stage of preparation, when you will have to prepare for pitching to prospective buyers, which encompasses activities like pitch preparation and presentation, preparing for common questions that most buyers ask, compiling documents for primary scrutiny and so on.
  • Poor Choice of Buyer Outreach: How do you attract prospective buyers without upsetting customers and employees? There are two important things to remember here – ‘targeting’ and ‘confidentiality.’
    Many of our users tell us how they wasted precious time and money on ads in newspapers and magazines – without much results. Why? Because ads are less likely to give you the targeted reach that a technology platform like Indiabizforsale.com does. At the end of the day, you will have higher chances of finding a deal on a platform that brings together thousands of buyers, investors and businesses.
    Secondly, it’s best not to give away the identity of yourself or that of your business until a deal is on the table. When you tap into your personal network, chances are that word spreads and reaches your customers too. Our confidential, hassle-free messaging system addresses this problem for our users.
  • Quoting an Unrealistic Valuation: In our experience, unrealistic valuation is one of the primary deal-breakers. Over-pricing your business makes it unattractive to a buyer right at the outset. Not to mention, your integrity becomes a question. Now, many business owners don’t over-price their business intentionally – they simply don’t know the right valuation for their businesses. The way out? Hire an expert valuer who understands your industry. Remember – always opt for a credible valuer with strong track record. At Indiabizforsale.com, for example, we have an independent valuation expert with over a decade of experience and strong professional credibility, who helps businesses with detailed valuation reports as a value-added-service (know more).

So, what are you waiting for? Start preparing to sell your business and stay tuned to our blogs and other resources to help you along the way.

Should I Use a Consultant to Sell my Business?

“Do What You Do Best – Outsource the Rest”

Every business owner looking to sell his business has asked himself this question at some point or the other. If you are wondering how we know this, it’s because we have worked closely with thousands of business sellers over the last few years. So, who are consultants? In simple terms, consultants are deal experts, who can help with industry-specific deal sourcing, legal implications, taxation, accounting and negotiation. Finding a serious buyer is a tedious task especially while you are still running your business. Hiring a consultant can free your time to concentrate on managing the business while the consultant would plan and implement the necessary leg-work for your deal.

Primarily, a deal consultant helps both business buyers and business sellers with deal sourcing, i.e. discovering prospects based on preferences. But how do you decide whether to hire a consultant or not? We are here to help you out – we have listed down a few factors for you to keep in mind when deciding whether to hire a consultant or not.

  • Deal Value

This refers to the price or the price range at which your business is expected to be sold. While there is no hard and fast rule – it is believed that for deals below INR 5 Cr. it might not be worthwhile to hire a consultant. This is because the consultancy fees might prove to be too much with respect to the deal value. Consultants usually charge a percentage of the deal value as a commission and a retainer fee in some cases. 

Wondering what the approximate deal value could be for your business? Our blog here tells you everything you need to know about business valuation.

If you are in a niche industry and have no other way of sourcing buyers but to hire a consultant to manage your deal, it might be worth loosening your purse strings. However, if sourcing buyers is your only concern, you could try listing your business at Indiabizforsale.com first and explore the inquiries you receive.

  • Your Experience

If you have prior experience of selling one or more businesses (either your own venture or a business owned by somebody else), or if you are a deal professional with expertise in closing business sale deals, you might not need a consultant. However, it might be useful to note that if you have not sold a business recently, the past experience may not necessarily or fully help you in selling your current business, as the industry standards could have changed, applicable compliance provisions could have altered, and you might not be fully aware of those.

If you are selling a business for the first time, these top 5 tips can make your life easier.

  • Availability of Consultants

Availability of consultants is another important aspect to be considered. As a matter of fact, good consultants with a proven track record and necessary industry exposure are often not easily available. A tested way to source good consultants is to request recommendations and references of professionals in your network whom you trust – but unless you belong to the business buy / sale network, it is unlikely that you will receive a lot of good recommendations.

We hope that this article helped clear the air about how to go about deciding if you need a deal consultant. In the end, whether you choose to hire a consultant or not, both the decisions will involve a few risks. Focus on considering which scenario is more suitable for you.

To know more about how to go about selling your business, stay tuned to our blog and other resources. Feel free to write explore IndiaBizforSale.com.

I Want to Sell My Business, but How? – Top 5 Expert Tips for You

Winners Don’t Do Different Things, They Do Things Differently

 If you are a business owner looking to sell your business but don’t know where to begin, you are not alone. Every year, thousands of business owners who are looking to sell their businesses, raise investment or form partnerships for growth, join our platform. We work closely with them as well as with thousands of buyers and investors, to ensure hassle-free deal discovery and seamless matchmaking for all, and have successfully closed multiple deals from various sectors like healthcare, IT, pharma, fintech, education, manufacturing and hospitality. This means that we are in a unique position to understand your confusion and challenges, and can also help address the same.

In this article, we share with you the top 5 expert tips to sell your business.

  • Prepare Your Business for Sale: Often overlooked by many first-time business sellers, preparing your business for sale is a crucial first-step. When should you start? Ideally, the day you decide to sell your business. What should you do? The idea is to identify the areas that can be addressed within a specific timeline (anywhere between 1 – 6 months) which will help you secure better value for your business and / or smoothen the process of selling. Common activities at this stage include sorting all business documents and information, enhancing team productivity, repairing vendor relationships, consolidating clientele, fine-tuning quality fail-safes, etc. Read our post on How to prepare your business for sale and why you should start now.
  • Reach Your Target Audience: A common mistake that many business sellers make is approaching the sale process through a mass-marketing medium. For example, while classified ads in newspapers have a broad reach, what is the probability that a buyer matching your requirements will actually go through that ad? Not to mention that it will burn a hole in your pocket. When it comes to selling your business, cost-effective, highly specific solutions like technology platforms dedicated to business buy/sale are your safest bet. Indiabizforsale.com is a pioneer in this domain in India and has 25,000+ users on its platform. Our recent post show you How to identify a potential buyer and go about the deal-making process.
  • Maintain Confidentiality: In the interest of your business, employees and customers, it is best to protect the identity of your business as well as your own identity until a buyer is seriously interested in your business. Refrain from sharing your details unless absolutely required. Indiabizforsale.com, for example, enables completely confidential exchange of information between its users through its anonymous listings and messaging systems.
  • Keep Up the Momentum: Many sellers start the sale process well, but do not focus on keeping up the momentum. Engage in a dialogue with buyers. Eliminate insincere prospects, and keep the conversation flowing with serious buyers. Monitor your progress regularly and identify areas where you are stuck. Focus on what you can do today instead of things that are holding you back. Proactiveness is the hallmark of a business seller. Prepare for due-diligence by compiling all your business documents, get your business valued by an independent valuation expert, and reach out to as many new prospects as possible.
  • Seek Help from Professionals: When you are stuck, it might be time to seek help from outside. Deal consultants, chartered accountants and seasoned negotiators are some of the people who can make your life easier. Before you make these choices, do not forget to factor in the reputation and credibility of such professionals, and the costs that you would need to incur. Assess every resource against the value they will bring to the table and see if you actually need their expertise. Read more on Selling on your own vs. using a consultant – how to decide.

So, what are you waiting for? Begin the exciting journey of selling your business today! At Indiabizforsale.com, we are committed to making deal-discovery a seamless experience for all. Stay tuned to our blog for more useful articles like this, and explore our website to explore potential buyers/investors for your business.

Top 5 Things to Do to Sell Your Business Quickly

“A ship in harbour is safe, but that is not what ships are built for.”

-John A. Shedd

Are you a business owner looking to sell your business? Are you searching for the best tips to make it happen?

Then, you are at the right place. Indiabizforsale.com has helped thousands of business owners, business buyers and investors in buying, selling and growing businesses as well as in investments and fund-raise for businesses. By working closely with our users and having closed numerous deals, we are in the best position to share with you the top 5 things you should start doing right away to sell your business quickly. Here are our top picks for you:

  • Organize Your Business Information: The first thing you must do is compile, assimilate and sort all the pieces of business information together and categorizing them for easy access and retrieval. Make sure you have audited financial statements in place at least for the last 3 years (if applicable), put together your business policy documents, receipts, invoices, appointment letters, contracts, past deal documents, agreements, intellectual property documents, technology specifications, market research reports, and so on. You will be surprised by how much time you save when buyers actually start seeking these information from you.
  • Polish Your Business Pitch: Did you know? For most sellers, the toughest questions to answer are: “Why do you want to sell your business?” and “Why should I buy your business?” Communicate the answers honestly but intelligently and try to establish the fact that your business is a viable proposition to buy. A common misconception is that only profitable businesses are viable opportunities, but you will be surprised to know that there are many takers even for sick businesses with future potential. Know more about how to sell your sick business.
  • Make Some Noise: This is a no-brainer. No one will buy your business if they are not aware that it is up for sale in the first place. You can reach out to your personal and professional networks, or post classified ads in newspapers, magazines, trade journals and directories. However, remember that by adopting these conventional approaches, maintaining confidentiality of yourself / your business might be at risk, and this might harm your business in the long run. The best option is to list your business for sale with technology platforms that assure anonymity, such as Indiabizforsale.com – India’s most preferred network to buy, sell, fund and grow businesses.
  • Hire a Consultant: If your business is in a niche industry, or if you are looking to sell your business urgently, hiring a consultant with good track record and credibility in your industry or related industries is a good option. It is often difficult to assess the credibility of a consultant. Getting references from your network as well as consulting multiple resources before choosing the right one is the best way to go.
  • Qualify Buyer Inquiries: We have seen many sellers wasting their precious time on buyers who are not really interested in buying their businesses. Not only does it slow-down the process, but also there’s a risk of critical information of your business reaching the wrong people. Qualify buyers in terms of their interest in your businesses, and only share critical information if you think that the buyer is serious about your business. You can also request the buyer to sign a Non-Disclosure agreement (NDA) before sharing sensitive information. Read NDA and 3 Other Deal Documents You Should Know About. Optimize the time you spend on a buyer by sharing information in a compact and step-by-step manner, and keep track of the discussion progress. Don’t be afraid to ask your own questions to get clarity about the buyer.

When it comes to selling a business, keeping the momentum high and maximizing your reach is more important than anything else. At Indiabizforsale.com, we are committed to making deal-discovery a seamless experience for all. Stay tuned to our blog for more useful articles like this, and explore our website for more.

Why Deals Fall Apart?

If it is important to you, you will find a way. If not, you will find an excuse.

Whether you are a business buyer, investor or a business owner, you must be wondering, what are the conditions that can make or break a deal. We have worked closely with thousands of users over the last few years in buying, selling, growing and fund-raising for businesses, and one of the most common questions we get asked is: What can make or break a deal? In this article, we bring to you our exclusive insights on keeping a deal smooth and hassle-free. Over the last few years, we have helped thousands of users on our platform to discover the best deals to buy, sell, grow and fund businesses, and this is a common question we get asked. While there are no hard-and-fast rules about stopping a deal from collapsing, there are, however, a few important principles that both parties in a deal can follow which can make or break a deal.

  1. Transparency and Honesty: This is a no-brainer. Would you ever like to enter into any transaction with someone whose ethics, integrity and morals are in question? Most likely not, and the same holds for the other party. The best deals are those in which expectation settings are clear right from the beginning. This is not to say that you must lay bare all the sensitive information about your business on the very first day. You can take your time and qualify buyers as per their seriousness and interest in your business before giving out critical information. However, do not lie, misrepresent or miscommunicate, and encourage the other party to do the same.
  2. Trust and Confidence: Sometimes, it is not enough to be just honest yourself. You have to give a chance to the other party to demonstrate honesty and commitment to you. We have seen a number of deals fall apart where either one or both the parties refused to walk the last mile with each other despite long discussions and no visible breach of honesty. There are a number of legal tools available to enforce understanding between two parties even before the deal actually takes place. But, in the end, these are just tools – you will have to cultivate the trust by yourself. Seasoned deal moderators and mediators often come handy in developing rapport between parties and getting the deal through.
  3. Realistic Negotiations: An important thing to remember is that, negotiations on aspects like valuation, payment terms, rights and obligations, etc. are meant to bring out a fair deal structure, and not to solely serve the interests of any one party. For example, a common mistake that business owners make is to overvalue their business. Get your business valued by an independent valuation expert to avoid unnecessary conflict. Have a seasoned negotiator on-board to help you get the best out of the deal without undercutting the other party.
  4. Seamless Communication: A deal is never just a piece of paper. It happens between two people, or two parties, and to bring the deal to closure through a long journey, it is important that communication between them is regular, well-timed, and two-way. Take out time to listen to the other party and voice your own concerns. Rope in your consultant when needed, but stay connected to the deal at its core by getting regular updates. Technology has made life easier today, but it won’t harm to meet each other once in a while and iron the kinks out. It is also important that you talk about things outside the deal such as your work experience and professional background, future plans, and so on.

So, what are you waiting for? Discover the perfect business opportunity that matches your preferences and get the deal of your dreams with Indiabizforsale.com, the most preferred network to buy, sell, fund and grow businesses in India. To know more about who we are and how we can help you, write to us at [email protected].

How NOT to Sell Your Business – 4 Mistakes that Business Sellers Make

If you are planning to sell your business, and especially if this is the first time you are thinking of doing so, you must be wondering about what pitfalls to avoid from early on. While there are no hard-and-fast rules, in the course of working closely with thousands of business owners, buyers and investors over the last few years, we have realized that there are a few common mistakes that sellers often make which can be easily avoided.

In this article, we will share these 4 common mistakes of business sellers with you, and our expert advice on how to handle these scenarios instead.

  1. Waiting for Too Long to Initiate the Sale Process

Believe it or not, most sellers struggle with the decision to sell their business, and even after they decide, they often delay the process. We understand that business owners have an emotional attachment to their business which is one of the primary reasons for this inertia. However, the more you delay the process, the less the situation stays in your control. Once you have decided to sell, tell yourself that there is no looking back and that you will make the best of this opportunity. Start sourcing buyers from dedicated platforms like IndiaBizForSale.com for quick deal discovery, and simultaneously focus on preparing your business for sale – which brings us to the next point.

  1. Not Taking Sale Preparation Seriously

The common question that sellers ask is – my business is going great, why should I prepare it for sale? Another question that we get asked frequently is – how should I prepare my business for sale?

The important thing to remember here is that irrespective of how well your business is doing, you can maximize the sale value and streamline the sale process by preparing your business for sale. Sale preparation involves identifying areas which need attention and working on those with a fixed timeline in mind – typically between 1 to 3 months. For example, optimizing team structure, sorting out financial records and documentation for due diligence, getting a realistic valuation for your business by an expert, addressing any legal issues, streamlining processes, resolving disparities, etc. are some of the activities that can be undertaken during sale preparation.

  1. Missing Out on Pre-Qualifying Buyers

Ensuring confidentiality and pre-qualifying buyers before sharing sensitive information is perhaps one of the most critical areas that business sellers often miss out on. Remember, that you should not reveal your own identity or the identity of your business until a buyer has shown adequate interest. Sharing the financial details of your business, business strategy, trade short-cuts, etc. should be done when the discussion has proceeded to an advanced stage – i.e. when the buyer has established explicit and serious interest in buying your business. Sharing any critical information such as trade secrets, client list, or intellectual property such as product formulations, etc. is recommended only when an MoU has been signed. At IndiaBizForSale.com, we help business sellers communicate confidentially and securely with business buyers and investors through our platform.

  1. Not Marketing Your Business

Can a business sell itself? Not really – and this is where business sellers sometimes get it wrong. To put it simply, no matter how good your business is, you will still have to market it, and no matter how bad you think your business is, marketing can still help you get buyers faster than any other way. In today’s growing digital world, online marketing campaigns are more important than ever, and even trumps print ads in newspapers in terms of results and cost effectiveness. In fact, keeping this in mind, we provide dedicated marketing services especially for business owners who are looking to sell their business urgently and who opt for these services with us. We help market such businesses efficiently and confidentially while maximizing the reach to the target audience.

So, what are you waiting for? Jump-start your business sale process today and avoid the most common mistakes that most sellers make. Stay tuned to our blog for more such insightful articles. To know more about what we do and how we can help you, visit www.indiabizforsale.com or write to us at [email protected]

How to Prepare Your Business for Sale and Why You Should Start Now

As the owner of a small business, this might be the first time you are considering selling your business. It is natural for you to feel overwhelmed and wonder how to sell your small business. We have worked closely with thousands of business owners like you over the last few years, and understand where you are coming from. Serious business sellers often ask the question – How can I prepare my business for sale? Hence, we thought of sharing our experience in this article along with a few expert tips that can help you with sale preparation. 

Why Should You Prepare Your Business for Sale?

Preparation is an important step in the process of selling your business. The key benefit of sale preparation is that it helps you take stock of your business and review it with a fresh eye. Sometimes, as a business owner, you tend to get so involved in the day-to-day affairs of the business that you barely get time to take a hard look at how things stand, and consider things as objectively as possible. Sale preparation can help you do that.

Secondly, good sale preparation can help you create a great first impression on prospective buyers. Having your books of accounts in order, sorting your key business documents, reviewing your internal systems, and doing organizational improvements can go a long way in smoothening the sale journey for you. We have seen many situations where efforts made on sale preparation even led to better valuation – for example, a staffing solutions company spent a year on fixing its organization structure issues and eventually received a valuation that was very close to the owners’ asking price.

What Does the Process of Sale Preparation Entail?

While there are no hard-and-fast rules about how to prepare your business for sale, we advise that you take a methodical approach to it. You can start by getting together your key team members, preferably from different functional areas such as marketing, distribution, finance and accounts, product development, human resources and so on. Seek their objective view on how things stand and what you can do as a team to make things better.

If the exercise starts to get too overwhelming, take a time-based approach – what can you and your team do in the next 1 month? 3 months? 6 months? Who will be responsible for executing each of the key improvement areas? Who will they be accountable to? Keep an eye on the on-going affairs of the business too – this exercise should not disrupt your usual business as far as possible. Monitor the results of sale preparation periodically and make sure your team members take it seriously.

How Long Will It Take to Prepare Your Business for Sale?

The duration of sale preparation is again a matter of your judgment. Technically speaking, it is a function of two parameters:

a) How much improvement do you want to make in your business?

b) By when do you want to sell your business?

Goes without saying, the more improvements you want to make, the more time will be required. As an entrepreneur, it is important you distinguish the critical aspects from the less important ones. For example, having the books of accounts in shape is a top priority for most buyers.

Secondly, keep an eye on your timeline goals for selling your business. For example, if you must sell your business in a year, you cannot spend more than 6-8 months on preparing your business.

When Should You Start Preparing Your Business for Sale?

The answer is – now!

Yes, if you are seriously considering selling your business, you should start sale preparation right away. There is no good time to start. The earlier you start, the more prepared you will be at the time of handling buyer inquiries, and the more advantage you will have. You will also be able to take stock of things better and get an objective view of where your business stands as of now, and how much can be done in what time. The more you delay, the more you will lose out – one of the common mistakes that sellers make.

So, what are you waiting for? Now that you know how to prepare your business for sale, go for it! At IndiaBizForSale.com, we help thousands of business sellers make their businesses more saleable and connect with matching buyers quickly. To know more about what we do and how we can help you, write to us at [email protected].

Selling a Business on Your Own vs. Using a Consultant – How to Decide?

The decision to sell your business can be overwhelming. As David Allen says, “You can do anything, but not everything.” Luckily there are professionals available for help – popularly known as brokers or deal consultants. So, who are consultants? They are deal experts, usually with multi-disciplinary expertise in one or more of the following areas: law, taxation, economics, marketing, accounting, finance and negotiation.

A deal consultant is primarily responsible for deal sourcing – i.e. enabling prospective buyers and sellers discover each other and carrying out match-making between buyers and sellers based on their preferences. In order to ensure a smooth transaction, the consultant stays tuned to his preferred industries and domains, specifically around the do’s, don’ts, and the compliance considerations in a deal. Sometimes deal consultants also help with legal advice, taxation strategy, pricing and valuation.

Should you hire a consultant for selling your small business? It depends on several factors, which are discussed below.

  1. What is the deal-size of your transaction?

Deal size is one of the primary considerations in hiring a consultant. Deal size or deal value refers to the price for which your business will be sold. While there is no hard and fast rule, in general if the deal size is below INR 50 lakhs, it might be difficult for you to find quality consultants who are interested in it, or even if you find one, their rates might prove to be too high relative to the deal size. However, if you are convinced that you absolutely need a consultant to manage your deal, it might be worth loosening your purse strings.

  1. Is the deal in a niche industry?

Do you belong to an industry which is niche, and hence finding buyers and managing deal compliance is challenging? In such a situation, having a consultant on board is often the best way to go about it. Remember to hire a consultant with experience and knowledge in your specific industry and make sure that he has a proven track record of managing deals of your size. It is possible that you may need a consultant only to source a buyer and not for managing the deal, in that case you can also onboard consultants at more affordable rates.

  1. Do you have any experience and / or expertise in selling a business?

Are you a pro-seller with experience of selling one or more businesses, or are you a deal professional yourself? In that case, you will probably not need a consultant. However, remember that your expertise of selling a business in the past may not necessarily help you in selling your current business, as industry standards may differ widely and applicable compliance provisions are updated periodically, which you may not be aware of.

  1. Are any good consultants accessible to you at affordable rates?

Availability of consultants is a key factor. Good consultants who have a proven track record, are professionally qualified, and have adequate industry exposure, are hard to find. A reliable way is to go by recommendations and references of people in your network. A consultant’s charges should also be affordable with regard to the deal size you are looking at, making it even harder to spot useful consultants.

  1. Do you necessarily need a consultant for managing the entire deal?

Sometimes it is possible to cut corners and have a consultant who takes care of a few critical areas instead of the entire deal. For example, you may hire consultant to do any one or only a few of the following: source a buyer, negotiate a deal, valuation, compliance, taxation, etc.

The idea here is that instead of hiring a consultant for managing the entire deal at exorbitant rates, you can allocate specific functions to the consultant, and save on time and resources instead.

At IndiaBizForSale.com, we help sellers and buyers connect to consultants for securing deal services, and also have an in-house team to help with the overall deal management. To know more about what we do and how we can help you, please contact us here.

How to Sell Your Sick Business?

Who said exit is only for the chosen few?

Businesses thrive, and businesses sink. Like people, enterprises too go through good times and bad. Competition, changing consumer preferences, other market actors, cash flow dry-up, or simply an unforeseen circumstance might have brought you to the point where things aren’t working for your venture any more. So, what do you do? Do you shut shop, liquidate your assets, and file for bankruptcy? Sure, that’s an option too. But, did you consider selling your sick business instead?

Just because you think you might not be able to pull it through much longer, does not necessarily mean that your business isn’t valuable. And it definitely does not mean that no one else will be interested in your business! While it may seem unlikely to you, there are buyers – individuals and enterprises – out there looking to acquire troubled businesses, and may be even pay a fair price for it.

So how do you go about selling your sick business?

  1. Diagnose and Accept the Actual State of Your Business – Often, the first step to accepting the current state of your business is to diagnose its problems accurately – sit with your partners, ask your key employees and consult your cherished customers. Do you know, many businesses carried out this exercise only to feel motivated to give it another shot? Even if you don’t feel that way – it’s ok. Just begin with the objective of getting to know what exactly is the problem with your venture.
  1. Look for Ways to Make Your Business More Saleable – What are those handful of things you could do right away to make your business more saleable? Identify the quick-fixes that can be readily brought in, and see to it that these are implemented. Simple changes like improved hygiene, better records and documentation, having efficient systems in place, activating quality controls, etc. can go a long way in putting your business in a better position to sell!
  1. Create a Turn-Around Strategy for Your Future Buyer – Think about it, why would anyone buy a business that’s not doing well presently? It’s only because they hope to do something better out of it in the future. Put your thoughts in that direction – your buyers will care about you if you care about them. What are the ways in which a potential buyer can revive your business? Under what conditions? Is there a specific set of buyers who will be able to do this better – for example a buyer with better distribution coverage, or a buyer in a complementary business?
  1. Get a Fair Valuation for Business – It is extremely important that you ballpark a range for fair valuation of your business. Just because you have not been thriving lately, doesn’t mean your business is not worth its salt! Also, by having a fair valuation in place, you will have realistic expectations about what price you can expect from a prospective buyer.
  1. Look for Potential Buyers – Now that you are ready to begin the selling process, you can list your sick business for sale both online and offline. Remember – do not share the identity of your business or your own identity anywhere! However, you can share the basic details such as the industry, location, products, along with a few words on the current state of your business. Remember, that you might have to be patient for inquiries to come in.
  1. Come Clean, But Don’t Settle for Less – It is important that you communicate the condition of your business clearly and completely to a potential buyer. If the buyer expresses further interest, you can share the turn-around strategy with him as well, to help him make informed decisions and to improve the chances of closing the deal. However, you need not settle for less than your fair valuation, unless you want to exit immediately at any price.

If you have a sick business or know someone who has a sick business, you now know how to go about selling a sick business. This article has been brought to you by IndiaBizforSale.com – the most preferred network to buy, sell, fund and grow businesses in India. If you have a question to ask or want to know more about what we do, please contact us on [email protected]