Sell your Business
Selling a business is complex and time-consuming. No to business sale is the same. Finding the right deals for your business is important and this requires efforts.
Before selling your business, it is advised to start preparing a year or two before. This helps you plan and prepare and also get the highest market price possible. Selling your business and getting maximum profits depends on a number of things including the broker service employed, time of selling, and the reason you are selling the business.
Steps to selling your business
While selling your business can be a tough process, knowing the fundamentals can make it less tasking.
Get a professional valuationDetermining and knowing the real value of your business is not so easy; you may need the professional help of a valuation company to do that. This also gives credibility to the entire sales process.
The appraiser will include any cost spent in preparing the business for sale and this can be used to set appropriate price.
Since most business owners have more than 80% of their personal value linked to their business, valuing a business is essential. This helps to prepare the owners for life after the business is gone.
Document your financial statementsBuyers are looking to buy businesses with potential for profit and long-term existence. This is why selling a business takes time since buyers make all necessary enquiries before committing to the sale.
As a seller, it is important to consider this. All financial recordings and history must be detailed, transparent and well-documented for easy perusal by prospective buyers.
Increase the salesA major step in selling your business is making that business attractive. You can do this by improving the overall performance of the business in terms of revenue. You can also make sure to balance the books, maximise profit, which ultimately increases the business value.
Make sure your business is not going out of business when you are trying to sell it off. It can decrease your profits.
PrepareKnowing when to exit is vital to the survival of a business. This is why experts advise businesses to start planning their exit a year or two before the actual sale happens. This preparation helps you get things in order, improve on your sale and make your business attractive, and also balance the financial books.
Use a trusted business brokerFrom finding the ideal buyer to guiding you to get the maximum value for your business, business brokers are your best option when you need to sell your business.
At Small Business Post, as your broker of choice, we can help you with
Business valuation and negotiation
Marketing and advertising to potential buyers
Securing business finance for your business
How to make your business attractive before selling
Increasing your company value can help maximise the profit you would receive for your business. Consciously influencing this value can go a long way to give you high bargaining power during the sale.
To do this, you need to perform a SWOT review of your business. SWOT stands for strengths, weaknesses, opportunities and threats. Reviewing where and how your business stands under these four terms will greatly improve the value.
Other steps include;
- Creating Brand awareness
- Having a stable customer base
- Creating a disruptive product
- Identify and strengthen the company’s greatest division
- Improve pricing
- Invest in the long-term
Factors to consider before selling your business
The processes involved in selling a business are enormous. The timeline to completing the sales can also vary. However, before selling to a buyer, there are a few topics you must consider.
You must have a prospectusA prospectus is very detailed document about your business. It contains information about your business, your product and services, your niche industry, and includes your financial records. Providing potential buyers with enough and right information is essential, however, not all information are necessary.
You must consider if your buyer(s) have financingYou must consider if your buyer or potential buyers have enough fund to buy the business. If not, what financial options are they using and how suitable is it you as the seller.
You must know the earnoutsKnowing the earnouts is having knowledge of when and how you will be paid. Is it by check when the sale is closed or paid in instalments?
What negotiation strategies would you be using?Choosing the right negotiation strategy between you and the buyer is important. This is why it is important to work with a broker so they can handle the negotiation better.