Have a business for sell? Some questions to ask yourself
Putting up your business for sell is a once-in a lifetime opportunity, which you need to perfect in order to reap the rewards. After all, you don't want to sell the business you have worked so hard to develop at a cheap price or to a wrong seller, do you? That being said, there's a lot which goes into preparing a business for sell. In order to be able to successfully prepare your company for sale, you need to start with a few questions to yourself as the business owner. The following are some of them:
- Can your business be sold?
- Do you know your business' worth?
- Are you ready for negotiations?
There are many elements in a business which may make it an attractive proposition for a buyer. You need to find what that element for your business for sell is. This way, you can know what the base of your selling proposition is or what your strong point is. So find out whether your company for sale has a long history of profitability, a large customer base, a niche product, a skilled workforce or a great location. Once you lock on the main value proposition for your business, you can use it to convince the buyer as well as to negotiate effectively.
Many business owners have no clue about the value of their business. They make certain assumptions based on the amount of work they have put in and either overprice or under-price the business for sell. This is a big mistake, which will seriously hamper your business-selling efforts. Don't base the selling price of your business on assumptions. Get a professional business valuation for your company for sale, which will give you an idea about what a buyer is willing to pay for it. Such a business valuation will not only give you a fair idea with regards to the price, it will also help you in negotiating effectively with prospective buyers.
The last step of the business-selling process is negotiations. This is a tough stage in which a majority of deals can break down. Have clear goals for your business for sell when you enter the negotiations stage. Your expectations should also be reasonable. For example, you be hoping to get full cash when you put up your company for sale. However, this is less likely to take place in today's cash-strapped market. You can instead negotiate for a non-cash deal with a partnership in profits or etch out a deal where you can help with the business once the business is handed over to the new owner. While this might not give you cash right away, it may be more profitable in the long run. Keep such long term goals in mind when you put up your business for sell.
You will be able to follow the steps of selling a business only when you are clear about all these issues. Having clear answers to these questions will enable you to etch out a successful deal for your business for sell.
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