6 Actionable Tips on How to Sell A Business
Category: Business For Sale
Knowing how to sell a business is a skill that many people don't get to practice. There is an art to selling a business for profit. Therefore, you should get help even, when you're listing your business for sale by owner. It is important to know the basics of how to sell a business, before you list your business for sale. You need to know how to present the business in the best light possible. Selling a business is much like selling a house, because small tweaks can have big impact on the sale price. The best time to find issues is before your list business for sale. Get advice from your accountant, lawyer, and business broker, because you don't know what you don't know. It makes sense to get more than one opinion. Our team is confident that we can earn your business, because we know how to sell a business better than anyone. We also offer the best options. Give us a call for a free consultation at (312) 436-2748.
These are the best tips on how to sell a business:
Clean up the books
Buyers like being able to see the money trail, because that is how they can determine the value. Investors expect to see the record for the last three years. Buyers don't have much more to judge than your books. The books tell a lot of the story behind the business. The better your books and the more detail you provide the better the impression you will give buyers. You want to make it easy for the buyers to review the books because missing info kills interest. It's important that you don't look like you're hiding things.
Get a business valuation
Most accountants use similar business valuation methods to determine the worth of a business. There are many things that factor into the value of the business. These factors include financial statements, business model, marketing, customer base, staff, operating procedures, and more. Your bank statements and tax returns go along way toward showing the earning power of the business. There are different methods to determine business value, so make sure you know what method your accountant uses. It is also important to understand why this method works best to determine the value of your business.
Organize your business
Make sure you have all paperwork like vendor contracts, leases, legal papers and any important documents handy. You need to make sure everything is up to date. Find out if can transfer your lease and other contracts to a new owner. You don't want get to closing table and find out you missed an important detail.
Focus on the business
Don't take your eye off the ball, because you need to focus and improve the business as much as you can. A lot of business owners lose money, because they let slack off when they decide to sell. Selling a business is not a sprint, but a marathon. The average business takes six to nine months to sell with a broker. The average business FSBO takes even longer. Ensure that you profit selling your business by increasing profits of the business.
Review your staff
Do you have someone that can help the new owner run the business? Having someone in place to insure a smooth transition makes your business more desirable. You also want to get rid of dead weight or overpaid staff. It usually is a good idea to keep your intention to sell from your employees. Effort tends to slack and loss tends to increase when the staff knows you listed the business for sale.
Think about the reason you're selling the business
The first thing buyers will want to know is why you're selling your business. It is important to put yourself in the buyer's shoes. You need to be able to show buyers there is potential to make money. Make sure to contact us at (312)-436-2748 with any questions about how to sell a business.