Tips for Selling Your Small Business: What You Should Do to Get Everything Ready

Do you need tips for selling your small business?

Whether you’re retiring or moving on to another venture, getting your affairs in order so that you can sell your business is a process that’s just as involved as starting the business was.

Like the beginning of the company’s life cycle, the ending involves a number of steps and precautions that you need to take to ensure that the sale goes smoothly.

But what are those steps?

That’s a question you’ve probably asked yourself if you’ve been considering to sell your business.

So let’s take a look at some tips for selling your small business and you’ll see just what you can do to get everything in order before you move forward.

Know That Timing Is Everything

Just like when you started your business, the time has to be right for selling your business. Not only does this mean that there has to be a market for someone to buy it, but you have to make the right preparations in order to get the most out of the sale.

This means that you should take the time to do things like:

  • Get Your Financial Records Straight – Start with your financial statements and move on from there. Make sure that the numbers are accurate so that any potential buyers aren’t caught by surprise during the due diligence phase.
  • Optimize Your Business Operations – Even though your business will be changing hands, there’s a good chance that employees and other parts of the company will stay in place.With that being the case, you want to make sure everything works at its best. This will make the business more attractive to potential buyers and help ease any uncertainty that might be present.
  • Continue Improving – Even when you consider selling your business, make sure you do what it takes to continue improving it.Selling a business isn’t just about showing your potential buyer that what exists today is profitable, it’s also about showing that it has the potential to grow even more profitable in the future.

Among the tips for selling your small business, getting the timing right is the one that will lay down a strong foundation. Establish a time frame of roughly one or two years prior to your proposed sale date, so that you have ample time to prepare and make the transition a smooth one.

Getting a Valuation

There are companies that provide business valuations; which is an estimation of a company’s worth.

By having your company undergo a valuation, you will get a clear value of its monetary worth, so that you can know what your reasonable asking price should be.

There are several types of valuations that take into account factors like your company’s assets, income potential, and its market value compared to what other similar sales have generated recently.

Any professional that you hire to handle this part of a business sale should be able to illustrate your company’s worth in several areas. That way you have every advantage possible when it comes time to negotiate your company’s sale.

Finding Buyers

As far as tips for selling your small business are concerned, there’s a lot that can be said about approaching and communicating with buyers.

In many ways, it’s much like maintaining business relationships in that you want your communication channels to be clear and open at all times.

With that in mind, you want to do things like:

  • Work with Several Buyers – You already know that nothing is a sure thing, so have several buyers lined up in case an initial deal falls through.
  • Maintain Your Ground – Just like negotiating with anything else, there is likely to be some give and take in the sale of a business. You certainly want to show flexibility and be reasonable about your asking price. However, if your business is well-run and profitable and your valuation backs up that statement, then you will be better prepared to justify your asking price.
  • Keep Buyers in the Loop – Potential buyers should know what’s going on at all times. Extending that courtesy to them will show that you can be trusted in your dealings over the business.

Beyond that, you want to have your negotiations overseen by a legal professional who can make sure that usual and customary processes are being followed and the right records are being generated as things progress.

Moving on From There

These tips for selling your small business will ensure that things go in your favor as much as possible. After it’s all said and done, however, you want to double check that you fulfill the rest of your obligations.

Of course, this includes taxes, but can also include a host of other issues. It ultimately depends on the complexity of your business. With this being such an involved process, it helps to have the insight of a financial professional who can make sure nothing is overlooked.

You spent time building your company from the ground up, so it makes sense that you do everything possible to give it a proper send-off.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com.  Follow us on Twitter @portalcfo

Sign up for our weekly blog email update to stay tuned for details on our upcoming teleseminar for maximizing profits in your business.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.