As a business owner, you are very proud of what you’ve accomplished. You started something from nothing and have grown into a successful small business. However, you may be going through some life changes or need to look into selling your business. These kinds of business sales happen all the time, but to handle the financials, logistics, and transition period, you’ll need some tips and tricks to get you going.
There are plenty of reasons to sell a business. Maybe you are getting ready to retire and don’t have anyone to take over for you. Maybe you just need a chance to rest. Maybe you’re moving and you don’t want to take the business with you. Whatever the reason, understand your end goals and how you can benefit from a business sale. This is the first step to creating a positive selling experience for you. Remember, another business owner will be thrilled to land the acquisition of your company. Here are some of the steps you should follow as you look to sell your business.
Know the value of your business.
Valuation is the first step for you as a seller. You need to know exactly how much your business is worth before you start advertising it to potential buyers. Be realistic, but also don’t sell yourself short. It will help to bring in an appraiser who can document your business’s exact worth. They will have an objective perspective and can handle all the paperwork and logistics that prospective buyers will want to see. This will help you stay realistic about your asking price and range you can expect to get for your business.
Get a team together to help you close a deal.
Your appraiser isn’t the only expert you’ll want to bring in to help you close a deal. As you research “How to sell my business,” you’ll need to look into different professionals to help you. Start with an investment banker. This individual will help you do a preliminary valuation, market your business, perform due diligence for any contracts, and ultimately broker your final agreement. While you’ll often pay them monthly for consultation fees, their ultimate payout comes when you sell which means their motivations are tied in with yours.
Beyond an investment banker, you’ll also want to hire an attorney who knows about mergers and acquisitions. They’ll be able to nit-pick and decipher complicated contracts and provide expertise as you transition your business.
Lastly, you’ll want an accountant on hand who can process and provide whatever financial documents you may need. Having this strong team around you will help you confidently navigate all the steps of a business sale.
Come up with a detailed inventory of products and equipment.
When you’re selling a company, you’re selling all the aspects of that business. This means you need a strong inventory and record of your intellectual property, products, and equipment. While this is often included in your business valuation, it can help to give the new owner a detailed inventory.
For example, if you are selling a kitchen equipment store, you aren’t just going to list kitchen equipment as your products. You need to include specifics like your pizza ovens or sandwich prep tables. Go into detail about the different kinds of tables and how they each benefit different commercial kitchens. This will help the sale process go smoothly while improving overall inventory levels.
Try to boost sales and make the company look appealing.
If you are getting ready to sell a business, it’s natural to start pulling away from daily operations. However, this can actually affect your cash flow and lower your chances of getting the best deal with maximum value.
A strategic buyer will be looking for a successful company, not something they are going to have to revitalize. Before you sell, continue your work to boost sales and create a great environment. Bring in indoor plants and spruce up the office if you have to! These small steps will help drive the sale price up and get you a better deal overall.
Find a list of qualified buyers.
When you’ve poured your heart and soul into your company, you don’t want to sell it to just anyone. You want to be sure you have qualified buyers who will take care of your enterprise and close a final deal. Look for a list of a few potential buyers and don’t limit your search. Once you’ve found a few interested parties, you can begin to negotiate the final deal and look for the best acquiring company.
Prepare for a lengthy process.
Even after you sell a company, there will still be some time during the transition process. Know that selling a business isn’t something that happens overnight. Prepare for a lengthy process that could last from a few months to a few years. The value of a business is important to you, so you want to spend the time to make sure the business sale is done right.