Selling your business can be a major undertaking. If you are selling under stressful circumstances, it is easy to get sidetracked and to forget to do important things. Continue reading this article to learn what steps you need to take before listing your business.
The economy can have a great deal to do with how your business does on the market. If the market isn’t doing well and you can hold off on selling, this may be a wise idea. On the other hand, if investors are looking to snap up good deals and you need to sell, this could be a perfect time.
1. Preparation
Get all of your paperwork in order before you do anything else. You need to get your business financials together, information on jobs responsibilities for each employee and legal notices need to be in place for KPIs for each person or group in your company.
Look over your office space, any storage such as warehouses and the production floor. You want to make sure everything looks its best. If someone came into your business today, would they want to purchase it as is?
If you don’t think a buyer would like to buy your business as is, you need to do any necessary updates and upgrades before you are ready to put it up for sale,
Prepare a growth plan that you can show and explain to potential buyers. Many business buyers don’t have the vision of an entrepreneur, so you need to give them the vision they need. A well thought out plan for growth can go a long way.
Get your operations down to a specific process. Every piece of your business should be plug and play when you are trying to sell to a new owner. You don’t want anyone to have to figure out how to produce your products, market your wares or any other pieces to the business. Buyers want a well-oiled machine in most cases.
Make sure you have non-disclosures to give to anyone that you tell about the pending sale of your business. If shareholders or employees learn about the potential sale, it could cause serious instability.
2. Valuation
Valuing your business is an important part of selling your business. If you don’t have real numbers to back up the price you want for your business, you will get laughed out of the meeting room. A business valuation will allow you to price your business properly.
Use a valuation tool like the Valuator business valuations calculator to learn what your business is truly worth.
There are various ways to value a business. Depending on what your goal is for your business, you may want to use one specific of multiple ways to determine your business’ value.
Speak to valuation experts to see what the best methods are for working out your business valuation cost. While there are many different options, you need to understand how they work. You should stay away from the market approach as much as possible since your business is not an average business. If you paint your business as an average business, you are likely to get less than average offers.
3. Contacting a Business Broker
Once you are prepared properly and know what your business is worth, you may choose to contact a business broker. Business brokers often have contacts that will save you time trying to find a buyer. Your business broker needs your business valuation and will help you present to potential clients.
Reasons to Sell Your Business
You may have decided you are ready to hit the sand and sun. If that is the case, you can find plenty of places to go visit but what about your business? Your business may be the only thing holding you back from those delicious umbrella drinks.
A death in the family is another reason people often sell their businesses. It can be a difficult time to focus on anything other than recovering from a great loss.
Cashing in on big profits is another motivator for selling a business. If you want to make big money on your business, make sure your business valuation has taken your future potential into account. Without using a valuation like discounted cash flow, your business might not get the price it deserves.
Whatever your motivation is for selling, if you are stressing out over the sale, that can send up warning signs to potential buyers. Since you don’t want to scare your potential buyers away, you should figure out a way to float your business until you get an attractive offer.
Companies that are stressed to sell are going to get a lower price than those that are able to wait around for the right buyer. You also need to be ready to transition the business and work with the new owner. You can’t do the best job if you are worried about getting the money out of your business right away.
Get the Price You Deserve Out of Your Business
Make sure you get a proper valuation to get the price you deserve for your business. The more you pay attention to details and get your business in order before you sell, the higher of a price you can get. The preparation stage is the most important if you want to get a good business valuation.
