A Short Guide to Selling a Business

Is it time to sell your business and retire, or move on to the next opportunity? Whatever your motives are for selling, you need to plan ahead and make sure the sale is responsible and profitable; one of the best ways to meet these goals is to partner with a business broker. 

Define the Reason for Selling 

One of the first questions a potential buyer is going to ask is the reason for the sale of your business; if you don't have a good reason lined up, it raises suspicion in the mind of a buyer; they might think you are selling them a non-viable business to abandon a project for profit. 

Chances are you have an idea of why you want to sell the business; it might be to retire, pursue another business, or for personal reasons. If the business is not profitable, it's important you convey this information to the buyers; they might still be interested in a going concern business.    

Time the Sale of the Business 

If you are selling a business, make sure it is a long-term project and doesn't change hands overnight. If you want to get the best value from your business and ensure a smooth transition to new owners, you need to start planning the business sale around a year before selling it. 

Make sure you have around a year of planning and preparation before handing the business over to new owners; this gives you enough time to organize the financial records of the business and ensure the business structure is resilient for the takeover; it keeps things running smoothly.   

Value the Business Intelligently 

Chances are you have an idea of what your business is worth; this might be down to the quarterly numbers, the price you bought it for, and the investments you have made; still, you need to make sure you value the business intelligently and get the correct valuation overall.

The best way to achieve an accurate valuation is to hire the services of a business appraiser. A business appraiser will draw up a document of the valuation that can be used during proposals. Additionally, you can cross-check appraisal against your personal valuation for accurate results.   

Use a Business Broker 

There are good reasons for and against using a business broker; on the one hand, selling a business by yourself saves money on broker costs, but this is only realistic if you are selling to someone you know, such as a partner, friend, or family member; someone you can trust with it. 

In other cases, it's better to partner with a business broker who can find the best buyers for your business or keep the sale quiet to drive up the asking price. If you're thinking about selling a business, find a business broker and book a free consultation to find out more about their terms.  

Use a Business Lawyer 

Of course, you need a proper legal framework for selling the business as well. To sell a business responsibly, you need three years of tax records and suitable financial documents in place. The easiest way to organize everything is to partner with a business lawyer.