Selling a business is a popular way for an owner to exit a business. However it is a complicate endeavor that requires well calculated considerations. It may need you to evaluate the timing of the sale, reasons and may involve experts to give you actual value of your business and also legal advice from a lawyer. A lot of consultations will be made to finally come up with figures.
Here are some helpful tips to help you get ready to sell.
REASONS FOR THE SALE
A business takes a lot of time and investments to grow and it is good to review the reasons for opting to exit; this is because it is difficult to make a price tag for many years of struggling. Unlike other business decisions in the past, this one is serious and it’s a onetime decision.
Most buyers will want to know the reasons for selling out. If the reasons are flimsy such as poor profits or none at all, it may be harder to attract buyers.
WHEN IS THE SALE?
Planning for the sale should be done early, preferably a year or two before hand. This gives you time to create good records and maximize on profits, eventually you will get good market value for your business. This plan will also ease transition to the new owner and also make sure the business still runs long after you are gone.
The selling time is also valuable in a business. Good timing, especially during an economical boom also means you realize profits from your sale.
GET THE ACCURATE VALUE OF YOUR BUSINESS
This may require you hire an appraiser to evaluate your business determine the worth of your business so that you don’t price it too low or too high. Detailed documentation will be important in giving credible asking price and will act as gauge on the final listing price. As such, it is important that your business keeps accurate and effective records.
SHOULD YOU USE A BROKER OR SELL ON YOUR OWN?
Selling your business personally ensures you save money by avoiding broker’s commission. It is also a great deal if you know the buyer personally, maybe a relative or an employee. On the other hand, involving a broker to sell the business means you have enough time on your hands to focus on your business. Additionally, you get higher sales as the broker will work at finding the highest price to maximize his commission. Depending on what your needs are at that time, pick the option that is most attractive to your specific situation.
PREPARE YOUR DOCUMENTS
Prepare important documents such as financial statements dating back to at least three years: current lease and valuable paper work concerning the business. In addition create list of contacts of suppliers and customers, this will be worthwhile information to potential buyers. Your information should give a description of daily running of the business.
HOW TO HANDLE THE PROFITS
Spend some time planning on how to spend the profits from your sale, get expert advice on taxes from someone with a tax llm and get out of any debts you may have. Instead of eating up all your hard work (even though you deserve it!) also plan how to invest your money.
Find out more at Intelligent Business Transfer