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Want to sell your business? Here’s how

If you want to sell your business, it can be complex to determine where to begin. The sale of a business can be a daunting task that can make someone feel overwhelmed. If selling your business is what you want to do, then this guide can help you plan and get through the sale.

Why do you want to sell your business?

Why have you decided to sell your business? This is a question that it is crucial you have the answer to, because it is one of the first things that any prospective buyer is going to ask you. Many business owners choose to sell because they want to retire, are overworked, bored, or because of illnesses or familial death. Another common reason to sell a business is that there is some sort of dispute with the partnership that currently owns it, and selling is necessary to end the dispute. All of these are easy to explain to a buyer, and they are understandable.

If you want to sell because the business is not profitable, you are going to have a hard time attracting any buyers. You might want to consider spending time working to make your business more profitable before selling it, so you can get more from the sale and have an easier time finding a buyer.

Get your financials organized

When you want to sell your business, one of the first things to do is get all of your financial information organized. If you use accounting software like QuickBooks, spend some time cleaning up your notes and making sure everything is in there. Get all of your financial statements in order, along with your projections and any important metrics related to your industry.

Having books that are incomplete or messy can kill the sale of a business pretty quickly, so take the time to get them all organized beforehand. It might be worthwhile for you to have someone conduct an independent audit of your business’s financials to help make sure your books are in order and to give prospective buyers some peace of mind.

There are a few questions you should ask yourself as you organize this information:

  •       What is the business’s financial position?
  •       Do you have any outstanding liabilities?
  •       What is your relative growth in both net income and gross sales?
  •       What is the relative size of your business?
  •       What is your average number of customers in a month, week, and year?
  •       Does everything align with your current projects? If so, why not?

What is your business worth?

Before you put your business up for sale, you need to get it appraised, so you know how much to ask for. An appraiser will put together a detailed explanation of how much your business is worth. This will help back up your asking price and can give you an idea of what to put as the listing price.

Determine your goals for the sale

When selling a business, there is more to your goals for selling than just to sell. Ask yourself some of these questions:

  •       Do you want to sell the entire company and just walk away with the money after closing? If you do not want to sell the whole company, how much of it do you want to sell?
  •       Are there employees or family members you want to sell to?
  •       Do you want to keep working at the business for a few years after you sell all or some of it?
  •       How important is it to you that your brand keeps existing?

If you have specific goals for your sale, make sure you keep them in mind when you put the business up for sale. There is no need to spend time exploring options for your sale that do not align with your goals for the sale.

Working with a broker

If you plan on selling your business to an employee or a family member, a broken is not necessary. However, selling your business is a time-consuming task, so if you are not selling to someone you know, using a broker is a good idea. They know the industry and can help you get the best deal possible for your business. It also means that you do not have to spend time searching for a buyer while trying to keep your business running. While you may not want to pay the commission for a broker, it can save you a lot of time and headaches to do so. In the end, it can be worthwhile to hire a broker if you need to find a buyer who is not a friend or family member.

How long will it take to sell my business?

It can take between three and 12 months to close a sale on a business. There are many things that can go wrong during that time, so it is important to keep in mind that you are not done until closing.

While you have an active deal being processed, it is important for your business to keep running as it always has. It may seem hard to find the time to keep running the business while selling it since selling a business can be a pretty time-consuming task, but you need to keep getting profits and meeting your projections and goals.

Closing

One closing day is over, and everything has been signed; you have the money and are ready to begin the next phase in your life. You should spend some time planning out exactly what you plan to do with the proceeds from your business’s sale, so you can start working toward that goal once the sale is complete. While you should not put a down payment on a condo to retire to just yet, you can begin looking for the right one so that once the sale is finished, you can buy it and begin the next phase in your life, whether that is retiring or starting a new business. 

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