Selling your business is an important and life changing step. You want all of your hard work to pay off for you. Selling your business takes a lot of preparation and patience. You must prepare your business and your financial records. You need to consult a professional to evaluate, price and help sell the business. Timing is crucial in the sales process as well as finding a qualified buyer. Here are my expert tips as related to selling a business.
DO prepare your business for the market
Clean and de-clutter. Make necessary repairs. Update decor. Doing these simple things will make your business more attractive to potential buyers and will have a positive effect on your asking price.
DO prepare your financial records
Gather all your financial records from the last 3-5 years. Check to see you have all the up-to-date financial data and information and that the numbers make sense. Buyers will request to review these documents and will be an important deciding factor in their decision to buy.
DO consider working with a broker
A business broker will market your business and assist you with the sales process. A broker will help you in prepping your business for sale and some will even help with putting together an exit strategy. They will attract buyers, get your business sold quickly and help to get you the price you are asking for.
DON’T over estimate the value of your company
Pricing your business too high will leave your business on the market for months. If you price your business too low you are cheating yourself out of money. Your accountant can assist in pricing your business appropriately and will also know how to structure your deal to your advantage when it comes to taxes.
DON’T sell your business at the wrong time
Timing is everything. The best time to sell your business is when it is doing well. This allows for your projections to reflect growth and profitability to investors. Selling your business during a slow growth period may require further investment to create growth. This is a less attractive option for both sellers and buyers.
DON’T sell too soon
The sales process takes time. If your business has been on the market for an extended length of time you may be apt to go with the first buyer that makes you an offer and you may have to go with it depending on your situation. However, it is best to have several potential buyers in line to get the best price.
Don’t sell to the wrong buyer
Be wary of selling to a competitor, friend or employee who may not be the right person to carry on the business. If you plan to offer the seller financing you will want to ensure the buyer can pay back the loan.
Selling your business should be a fulfilling experience. All of your hard work ultimately resulting in financial gain. Selling your business takes preparation and patience so be ready!