After years of hard work and dedication to your business, you’ve decided it’s time to let someone else take over the reigns. Although you’re an expert at growing a good idea into a thriving company, do you know how to prepare your business for the sales market? Achieving the goal of a satisfied buyer and a victorious seller can be difficult, but with preparation, evaluation, insight you can eliminate the element of luck and maximize your sale price.
First consider if you’re really ready to let go. For many, selling a business that they’ve poured blood, sweat and tears into can be an emotional decision. Although successful business owners will have anticipated and prepared for many of their industry’s ups and downs, they may not feel equipped to handle the eventual sale of the business they’ve fostered. Experts agree that selling a business is not for the faint-hearted. Consider enlisting the help of an attorney or financial expert to help you evaluate if you and your business are ready to part ways.
Timing is important. Unfortunately, many who decide to sell their business are forced to do so. Physical disability is a common reason for such an exit. According to Smallbusinessreview.com, 25-33% of American small business owners will be forced to leave their business due to a disability. A condition that continues for more than a few months could likely result in a long-term impact on your company. If you decide to sell, do so quickly while you are healthy and business is robust and you have time to plan the exit. You want to be in control of the outcome.
Is your business fit? Start with reviewing business records to make sure they are complete, accurate and inclusive. Check customer and supplier contracts to see which ones will be expiring soon. Then consider which business accounts are ineffective or draining on your resources and eliminate them. Once you have everything in order, prepare financial statements and projections that will demonstrate your business’ growth and revenue potential. Financial transparency will assure buyers your business is what you say it is.
Will your business show well to buyers? Successful home sales are largely dependent upon “curb appeal” and businesses are no different. If your block-and-mortar building or your Internet website needs an update, now is the time to do it. Rusty tools, out-dated equipment, cob webs and peeling paint: they all speak negatively to a buyer. Invest a small amount of money now to ensure a greater selling price later.
Set your asking price – but not before doing your homework. Many sellers tend to over-value their assets, so it might be wise to get your business appraised by a certified business appraiser or valuation analyst. These professionals will consider all tangible assets, including real estate, cash, inventory – even intellectual property, client lists and trademarks.
Now you’re ready to find a buyer. Some business owners start out working independently to market and sell their business. Eventually, most realize they need assistance from a professional service, such as a broker and the they’ll need to advertise their business to potential buyers, which can be done on a number of brokerage sites or marketplace (such as Flippa.com) for the buying and selling of private businesses, opportunities and franchises.
With these helpful tips its time to start planning and preparing to recoup the rewards of your hard work and investment in your business!