Steps to Take Before Selling a Business

If you’re a business owner planning on retirement, it makes sense that you’d sell your company. Instead of just shutting the doors on it, why not let someone else benefit from it after you collect a tidy sum from them? Of course, you may have only bought a company so you could later sell it too. Whatever the case, before you sell, consider the following.

First, always use an experienced broker for advertising the sale. You don’t want competitors or the market to know that you’re planning to go out of business. An experienced broker can represent you without giving away too much information about the company involved. They’ll also have all kinds of contacts to help get you as many offers as possible.

Next, be sure to get your books in order long before you start meeting with potential buyers. They’ll want to know about every dime that went in and out of your business for at least the last three years, including tax information. Have this information organized so that it’s easy to review. Lacking this kind of information will definitely kill any potential deal you could hope for.

Another reason to begin planning early is that you want the business to be as profitable as possible. This might seem obvious, but a lot of people sell their companies because they can’t bring in enough revenue. In either scenario, you’ll definitely receive more attention and offers if your business is performing well. As soon as you can, start making every effort to succeed. While you’ve hopefully always had this mentality, now that you’re trying to get someone interested in spending good money toward this goal.

Along the same lines, you want to smooth out any wrinkles in business’ regular functions. This may not make your company more profitable, but it will make it more attractive to anyone planning on taking it over in the near future. The easier it will be to transition the company to someone new, the better.

Finally, get a business valuation. Although you may have all the financials you need to make a prediction, being the owner means you could easily over-value it. Instead, you want the help of a third party to get a more accurate take.

Selling your business could mean a sizable payday and all the satisfaction that comes with it. To be sure this happens, follow the above advice.