Building a business is like saving for a nice vacation on a tropical island. Selling it is waking up from a nap on your beach villa’s hammock. That is in theory, of course.
Selling your business is not easy and with so much information and preparation in play, it may be best to play it safe. The two key factors to approaching any business sale are research and objectives. Study up on industry trends and valuations, potential buyer backgrounds, and brokerage firms that provide valuable services allowing you to focus on business.
Your Business Selling Checklist
Write everything down from start to finish. Create a folder containing tax and financial documents, and any contracts tied to the business in the past one to three years of operations. Do your due diligence on potential buyers and verify their financials, personal and professional backgrounds. Lastly, research and constantly read more about what you need to get started.
Finding a Buyer for Your Business
Your business is your bread and butter. You eat, sleep, and breathe what you do. And as such, you should know your company better than anyone. That is exactly why you would be wise to trust a professional to handle selling your business. Potential buyers evaluate companies based on overall value, financials, and potential.
Finding a buyer for your business can be as easy as putting up a sign. Having more than two or three employees, most small businesses cannot do this because that could hurt their reputation and decrease valuation. This process can be involved and at times calls for a sophisticated level of preparation to make the most from a sale.
The Big Four Mistakes When Selling a Business
Preparing to Sell
Lack of preparation. Much like home buyers, potential buyers for your business will be looking for a clean and functional operation. Handing the keys to an operation that runs smoothly with minimal owner presence is obviously ideal for potential buyers. A clean and organized workspace can go a long way to reassuring buyers when working with you.
In a small business, word travels fast. Customers, employees, and partners alike will look elsewhere if they sense you are selling the business. This is a good reason to work with a business brokerage firm. Business brokers help you maintain confidentiality and keep your business intact.
Running The Business
Buyers looking to buy a business will consider all aspects of an operation. From your financials to curb appeal, it all plays a part in representing your brand and by extension perceived worth. Business brokers give you the space to tend to your operations while they gather information, outline a plan, and market your business.
Certain factors increase and decrease your business’s value over time. However sentimental you may feel towards your company, remember that buyers do not. A brokerage firm will prepare a portfolio highlighting your business’ strengths and work to achieve the highest selling price.
Planning for what happens after you sell your business is a bittersweet moment. Emotions and personal convictions aside, get everything in writing from the beginning and remain objective by setting yourself clear goals.
It is normal to feel unsure or uneasy about taking this kind of step. However, you are not alone and there are plenty of resources to help you better prepare for this process. Hiring a business broker who guides you and represents your best interests is a sure way to be prepared to sell.