7 Steps Of Selling Your Business
Closing a successful business for sale deal is a tough task and will require a lot of your time and effort if you are planning to sell your business. The following are some pointers which should guide you through the process:
- Get your business for sale valued
- Be aware of why you are putting up your business for sale
- Have your financials in order
- Have reasonable expectations
- Make a good first impression
- Keep focusing on your business for sale
- Hire a professional to help you
Valuation of your business for sale is the first step in getting the process of selling a business started. You should get an expert valuation firm into the picture which can give you a realistic idea of your business worth. You can get your business valued through a number of sources like experienced business brokers, investment banking firms etc. On basis of this valuation, you can decide the asking price, the terms and conditions and also know the market position your business for sale holds.
Why are you putting up your business for sale? This is a question business brokers as well as buyers will be interested in getting an answer to. "If it is doing so good, why are you selling?" is a valid question from any buyer. You may be selling your business because you are thinking of retiring, changing your line of business or simply because you need funds. The reason you are putting up your business for sale has to be clear in your mind right from the start.
The business for sale process actually gains momentum when a buyer takes interest in buying your business. The interested buyer will generally require at least three years' financial information for your business in order to judge its feasibility. Hence, if you want to successfully sell business, your books of accounts need to be perfectly maintained by a professional.
Some businessmen put up their business for sale with such high expectations regarding price and terms that finding a buyer to meet them may become tough. Enter the market with reasonable expectations which match with the level of your business. If you expect $1,00,000 for a business which has a valuation of $60,000, you are never going to be able to sell your business. Consult a good business broker who will help you set realistic goals.
When you meet potential buyers, you need to make a good first impression. Your business should be organized, well-managed and profitable to be able to convince the buyer to invest in it. Before you put up your business for sale, ask yourself this: Is my business attractive enough to capture the interest of a buyer? Or does it need to be organized in a better way before I put it on the market? Make necessary changes to your business if you think it will make a difference in selling your business successfully. Your business broker will be able to guide you about the expectations of buyers and whether your business meets them or not.
Once you make a decision to sell business, don't neglect it. Don't focus on sale of business so much that the profitability deteriorates and buyers get a chance to offer you a lower deal. Consider the business your own and run it efficiently until the moment it changes hands.
And finally, get the help of a professional business broker who can guide you step-by-step until you sell your business successfully. Business brokers have a detailed idea about the business for sale process and will also be able to answer any queries you have along the way.
Keeping these points in mind will ease the business for sale process for you and help you close a successful deal.
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I agree. A seller who has its financial in order helps the sales take place at the front end of the diligence period and doesn't stifle it in the end. The worst situation is when the seller does not want to spend a bit of money up front to put the financials in order and want to do in during diligence which is a sure way for the deal to collapse.
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