There is no right or wrong time to sell a business and there can be many different reasons like financial, lifestyle change, family commitments, location etc. When a business owner has reached the decision that it is time to sell their business, there are many steps that need to be taken, carefully.
If you are thinking of selling your business, here are some tips to get you started:
1. Keep things confidential
If you are selling your business, don’t broadcast it to the world. Customers may have an impression that your company might be encountering serious problems, this would ultimately result to lower sales. Also keep your employees in mind. They would probably look for another job even before you can make the sale. Losing manpower can be a real hassle in your part.
2. Maintain accurate financial records
It pays to keep your financial books organized and updated. Provide all financial information that a potential buyer needs to know. They have the right to be given an accurate account of your profit and loss.
Your financial statement should be complete. You should at least state 3 years of your business’ income statements. It would also help to provide your tax returns and lease statements. If you are under a loan, provide your current balance and schedule of payments.
All the documents mentioned above would be thoroughly inspected by your buyers. Be sure that you are ready to answer all their questions about the financial status of your company. If you can provide your buyer a concrete business and budget plan, so much the better. It would give them the impression that you have an organized business to start with.
3. Make your business attractive
Entice buyers to buy your business by adding more value to your company. Make your package attractive as you can but remember to offer a fair price.
More buyers would be interested in your company if you make all your paperwork organized, complete and impressive. It would be a good idea to reduce your cost by avoiding purchasing equipment that is not really a necessity.
Build a stronger customer base prior to selling your business. You can do this by offering promos, discounts and special deals for your customers. Providing a complete documentation of your employers and suppliers is also a plus.
You can easily sell a business by keeping your premises clean and attractive. If your budget permits it, it would be a good idea to renovate your business area. If not, cleaning and repainting would do.
4. Price your business competitively
After looking at all your financial documents, you would have an idea on what’s your business is worth. It is recommended that you hire a professional financial analyst to give you a fair monetary value of your business.
You would not attract any potential buyers with a high price. The key in getting a quick sale is to keep the price of your required down payment very affordable. Some business owners are also willing to offer seller financing. This means that a seller provides or facilitates a loan for a buyer in order to close the sale. The buyer would then agree to pay an agreed amount over a specific period of time.
5. Manage your business well
Even if you are selling your business, you should not stop operation. Keep your business running. Your buyers would be totally turned off if they would see even a slight hint of desperation in your part. That’s why it is important to know the reason why you are selling off your business. Keeping your company operational would give an impression that your business is profitable and still in good shape.
6. Get to know your buyers
Build a good rapport with all your potential buyers. Be aware that there are a lot of scammers and timewasters out there. For this reason, always screen each and every buyer that you encounter. Watch out for your competitors who might play as a buyer in order to pry and gain confidential information about your business. For your protection, have your lawyer draft a confidentiality agreement between you and other interested parties.
In summary, you can successfully sell your business for a good price if you keep all your business and financial documents well accounted for. Next, keep your bidding process organized and legitimate. A good business agent or broker to help you through the process from start to finish.