What to Consider When Selling Your Small Business
Selling a small business is a complex venture that involves several considerations to be made. It can require that you enlist the help of professionals such as a broker, an accountant and an attorney as you proceed.
The business sale will also take much of your time and a lot of patience. We have compiled some advice that can help you build a solid plan and make the negotiations a success.
Why do you want to sell?
That's one of the first questions a potential buyer will ask. Owners commonly sell their businesses for many reasons that go from moving out of town to retirement. Make sure you are honest with you potential buyer about why you are selling your business.
Is your business ready to be sold?
Ideally, you will start getting prepared for the sale as early as possible, preferably a year or two ahead of time. This will help you improve your financial records, business structure and customer base to make the business more attractive to potential buyers.
How much is the business worth?
Determining the actual market price of your business will help you avoid setting your price either too high or too low. Locate a trusted business appraiser to get a valuation. Provide the correct information without letting your emotions get in the way.
Is hiring a broker worth it?
Selling the business all by yourself will allow you to save money and avoid paying a broker's commission. On the other hand, a broker can help you free up time to keep the business up and running while he looks for buyers and gets you the best deal.
Do you have all the needed documents at hand?
Get your financial statements and tax returns dating back 3 to 4 years and review them with an accountant. Develop a list of all the equipment that's being sold with the business. Also, create a list of contacts related to sales transactions and suppliers. Any relevant paperwork such as your current lease will also be needed.
Who is going to buy it?
Finding the right buyer can be a challenge. Inquire within your own network of contacts and find out if a family member, former colleague or trusted employee would like to buy your business. Try not to limit your advertising so you can attract more potential buyers.
Selling a business is a time-consuming and, for many, an emotional venture. Organizations such as SCORE, and your local chamber of commerce may offer relevant seminars and workshops, and even free mentorships, that might help you during this process.
At GBS Group we work everyday to help business owners improve their companies. Our multidisciplinary team of consultants can help you get your business in the optimal shape to be sold. Contact us so we can start working together on your future.