Selling your business is never easy. It may be a prospect that you have never even considered. Even so, things do happen, and sometimes selling your business may be the only alternative. That’s why it’s best to be prepared.
You might have to make this decision as a part of a long-term plan, such as a desire to retire and having no children who are interested in taking it over.
Here are some things to keep in mind if and when you decide to sell your business down the line.
Maintain a Proper Accounting System
Whether you plan to sell your business or not, it is imperative that your books meet legal requirements. This will provide you and your prospective buyer with up-to-date information; it should also provide a detailed financial history of the business.
Be sure to pay your taxes on time and take care of any pending tax matters. This will give any prospective buyer the impression that your business is run professionally.
Evaluate Your Business
You should get an evaluation from a business valuator regarding the total value of your business. This will help you give it a reasonable selling price. The valuator will calculate the total value of your inventory and business assets against any pending liabilities.
The valuator should also calculate the goodwill value of your business, in case the prospective buyer wants to continue under the same name or in the same location.
The profit you have been earning from the business and projected profits will also be needed when you and your buyer sit down to negotiate.
Get Professional Help
Your tax attorney or a legal consultant can help you with all the legalities when you find a buyer. Certain agreements will be needed, and your consultant can also help you explore options that will affect taxes.
If you need to get proactive in selling your business, you may need to hire a business broker.
In the Meantime, Keep it Business as Usual
Until you find the perfect buyer, run your business as usual, since prospective buyers coming like to see that you are busy, with professional business activity going on.
If your business has a physical location, you should also make sure that it is clean and well-organized to make it attractive to buyers.
Be Honest With Prospective Buyers
Explain the exact reason you want to sell your business and don’t beat around the bush. Buyers will always need to know why you want to sell a business, especially if it is doing well.
For your part, you should also look into the history of any serious buyer, especially if he or she plans to continue running the same business using the goodwill and reputation you have built up.
Stay on as a Part-Time Consultant if the Buyer Requests
If the buyer asks you to stay on so that you can teach the new management the ropes of your business, then you may choose to do that.
This may make your buyer feel a little more secure about the purchase and more willing to take the risk.
Consider these recommendations and be prepared to sell if and when the need arises.
