The Most Important Three Steps to Selling a Business
Some people will start and sell many businesses over time, while others will have but one, which as often as not was their lifes work. Those familiar with the process are always watching the market for signs that the time to sell is ripe. Those who have never sold a business before often dont know the mechanics involved in selling an establishment. Selling ones business isnt a decision to be undertaken lightly. The following information is intended to provide food for thought to the business owner who is new to the process of selling a business.
Deciding to Sell
selling my business, especially if its one in which youve invested a considerable portion of your life, might feel a bit like selling a part of yourself. People usually decide to sell a long held business for one of the following reasons: they are retiring, theyve decided to move on to something new, theyre changing locations and the business is a local one, and as the result of illness or injury. Once youre absolutely sure you do, indeed wish to sell your business, then it is time to begin the preparation process.
Getting Ready to Sell
How to sell your business? If this is your first thought, youll do well, for there is a definite method to successful selling. The first thing the business owner needs to do is to start getting his paperwork in order. If the business has been the primary means of the family income, take a hard look at the last few years of tax returns. Many family run businesses take advantage of tax loopholes to use business money to pay for things the family enjoys. While this can be a great asset, it can backfire on the owner when it comes time to sell, as it disguises the businesss true profitability. Therefore, it is best to know well in advance that you might sell in the next few years, and plan accordingly.
Setting the Price
Obviously critical to a successful sale, the price needs to be calculated with an eye towards the liquid value of the businesss assets and also, its client list and estimated future profitability. It is also necessary to determine what the market will support. You may find that you need assistance at this stage in the game. Most business brokers are able to recommend a qualified business appraiser in your area. Depending upon the nature and size of the business, determining its correct asking price is often the most complicated part of the entire process.
Once the paperwork is in order and the price has been determined, the rest of the undertaking should move along smoothly. People who start, run and sell many businesses over their careers advise people just starting out to plan for the sale from the beginning. Then, when the day eventually does arrive, each step flows efficiently, and the owner is quickly off to the next adventure.