Just like any other part of business, selling your business effective needs a careful strategy. This is something you should not do in a hurry. Once you have decided to dispose of your business, you should take enough time to think it over and evaluate your options. This includes identifying areas that might create a negative impression for buyers, and work on them to bolster your position and make your business more attractive. Having all of your books in order and your systems well-organized will also assist with the process.
Here are a few tips on how to prepare to sell your business for the best price while making the process as easy as possible.
- Have a Proper Explanation
When a buyer approaches you to take over your business, the most fundamental question they will ask is why you want to sell your business. You should have an appropriate reply ready to go. Telling them that your business is losing money or that it doesn’t have good prospects for the future will scare them off, so you need to have a plausible reason to sell your business that doesn’t deter potential buyers.
- Perform the Right Valuation
Before selling your business you must have a clear idea of its worth. This helps you know where it stands and how much you can reasonably demand from potential buyers. It is essential to understand the position of your business in the market and how it stacks up against your competitors. Additionally, you should calculate the current value of all tangible and intangible assets you hold as part of your business.
If you have a solid enough understanding of the current market and growth prospects of your industry, you may be able to make a proper valuation of your business yourself. Otherwise, you should consult relevant experts to value your business. If in doubt, you should always rely on the advice of experts in the field rather than making rough estimates.
- Make a List of Things to Transfer
It is essential to prepare a comprehensive list of all the assets you want to transfer as part of the sale of your business. You have to list tangible assets, such as machinery, equipment, computers, POS credit card systems, stock, fixtures, furniture, and even customer relationships. You also need to consider intangible assets like business contracts, lease, brand reputation, and licensing documents. As part of the sale, you should come to a clear agreement as to whether you will be transferring all staff and personnel along with the business.
- Prepare Financial Documents
Any potential buyer will want to know the financial history of your organization in as much detail as possible. It is advisable to ensure your business’ financial records are up to date, and for a sale you will need detailed records for at least the last three years. Fundamental records such as your sales history, tax returns, profit and loss statements, must be ready to present to potential buyers. It is advisable to take some time to get your business ready to sell once you have decided to dispose of it. That way, you will have plenty of time to shore up your company’s financial position.
- Keep Contractual Documents Up-to-date
You will also need to have current and comprehensive documents relating to your business dealings and relationships. Your potential buyers will be interested in supplier agreements, licencing contracts, lease documents, sales promotion consultation, and more. When you transfer your business, you will also need to transfer these contractual obligations to the new owner.
- Create the Best First Impression
A first impression can have an immense impact. If your business looks unimpressive, a prospective buyer will probably not even approach you. Be sure that you have all the basics in place. Aesthetics are critically important: keep your premises tidy. Make sure the site is well-presented and organized.
High-performing staff and a positive work culture will also boost the appeal of your business. Finally, have documentation ready to present to potential buyers. You should prepare a single-page document that summarizes your business profile, the reason for sale, what the deal includes, prospects, and more. This will give buyers gets a clear picture of your business in a nutshell, helping them to make an easy decision.
Successfully selling your business is all about convincing potential buyers of its value and what they have to gain in buying it. Since the buyer will be spending their money in the hopes of generating profit from buying your business, it is essential to keep your company in a condition that reflects worth in the market. Any issues must be sorted out, and everything must be kept in good condition. Finally, always allow room for negotiation in the terms and conditions – this will help you in the transfer process!
