Steps to Selling Your Small Business
Are you thinking about selling your small business? It can be quite an undertaking, but you will find that it is much easier when you have a plan and follow a few relatively simple steps.
Step 1: Consider the Reasons You Want to Sell
Make sure you have good reasons for wanting to sell. You need to know this because it will be one of the first things that a buyer will want to know. They need to make sure you aren’t getting out of the business because it is tanking. Some of the most common reasons for selling include retirement, moving on to a new venture, or illness.
Step 2: Write Down the Positives for Your Company
When thinking about the reason you want to sell, make sure you also take note of some of the elements that make your business an attractive option for buyers. Does the company have a large number of customers, or even a small and loyal group of customers? Are the financials in good shape, and does the company show that it is increasing in profits? All of these things can help to entice buyers to choose your company.
In addition, you should make sure you have all of your company’s financial statements and tax returns. You should have at least three years worth of financials for the potential owners to peruse. If you are selling any equipment along with the company, then you need to make sure that you make a list to show your buyers. To make things even easier for them, you should consider creating a list of suppliers and contacts as well.
Step 3: Valuation of the Company
You will need to have a professional valuation of your business to determine the approximate worth. This will ensure that you are not charging too little for the company, and that you do not charge too much. Often, those who are selling their business, because they’ve invested so much time into it, feel that the price should be higher.
Step 4: Find Buyers
You can’t sell a company without buyers, so now you have to find one. It can take several months or up to several years to get the company ready to sell and to find good buyers. One of the biggest parts of selling the company is marketing, and you need to make sure that you are marketing to the right places. However, some business owners do not want to let too many people know they are in the market to sell. They need to take a very cautious approach when advertising, as they do not want to alarm their suppliers or their customers. This leads into the final step.
Step 5: Get Help from the Professionals
While this is optional, one of the best options for those who want to sell their business is to work with professional business brokers who know and understand how to make a business shine when they are getting ready to sell.Working with a broker can also help to increase the confidentiality of the sale. They know how to find the right types of buyers and how to keep it quiet.
Overall, it makes the preparation and sale process as easy as possible so the business owner can work on other things.