01 Oct ARE YOU THINKING OF SELLING YOUR BUSINESS?
STEPS TO SELLING YOUR BUSINESS
Selling a small business is a complex venture that involves several considerations. It can require that you enlist a broker and a solicitor as you proceed. Whether you profit will depend on the reason for the sale, the timing of the sale, the strength of the business’s operation and its structure. The business sale will also require much of your time and, once the business is sold, you’ll need to determine some smart ways to handle the profit. Reviewing these seven considerations can help you build a solid plan and make negotiations a success.
- Reasons for the Sale
You’ve decided to sell your business. Why? That’s one of the first questions a potential buyer will ask.
- Timing of the Sale
Prepare for the sale as early as possible, preferably at least two years ahead of time. The preparation will help you to improve your financial records, business structure and customer base to make the business more profitable.
- Business Valuation
Next, you’ll want to determine the worth of your business to make sure you don’t price it too high or too low. Locate a business appraiser to get a market valuation.
- Selling on Your Own vs. Using a Broker
Selling the business yourself allows you to save money and avoid paying a broker’s commission. A broker can help free up time for you to keep the business up and running, keep the sale quiet and get the highest price.
- Preparing Documents
Gather your financial statements dating back three to four years and review them with an accountant. In addition, develop a list of equipment that’s being sold with the business. Also, create a list of contacts related to sales transactions and supplies, and dig up any relevant paperwork such as your current lease. Create copies of these documents to distribute to financially qualified potential buyers.
- Finding a Buyer & Completing the Sale
A business sale may take between six months and two years according to most experts. Finding the right buyer can be a challenge. If using a broker, this will be their responsibility, along with your solicitor, to ensure the sale completes.
Selling a business is time-consuming and for many, an emotional venture. A good reason to sell or the existence of a “hot” market can ease the burden, as can the help of professionals.
For more information about valuing & selling your business, and to discuss your specific requirements, please message me below or e-mail me:
Robert Carpenter FCA FIoD CertCII FRSA at firstname.lastname@example.org