Selling your business is a complicated move. Whether you’re retiring or simply looking forward to the next adventure, selling your hard-earned success involves taking a lot of things into consideration. For example, you’ll likely need a broker, an accountant, and an attorney as you move forward. And though you may not like it, the sale of your business will likely be a time-consuming endeavor.
But before you reach out to business brokers and other sales professionals, you need to assess your current situation. In order for a business broker to help you most effectively, you need to have all your ducks in a row. This includes determining your reason for selling the business you worked hard to create. According to the Q1 2017 IBBA Market Pulse survey, retirement is the number one reason to sell a business. Another large reason is that the individual no longer has the time to invest in it. If either of these fit your bill to a tee, you’re probably ready to begin the sale process.
To help you do that, here are three things you should do when you start the process of selling your business:
Time the Sale Properly
You should start preparing for selling your business as soon as possible. In the vast majority of cases, it’s best to start the planning process about a year in advance. You’ll need to improve your financial records, business structure, and customer base to make the sale as profitable as possible. Doing this prep work will also make the transition for the buyer much smoother.
Invest in a Business Valuation
Next, you’ll need to have a professional determine the ultimate net value of your business. This might sound like an overly cautious step, but it’s to make sure you don’t undersell or overprice your business. Locate a business appraiser for the valuation, and they’ll draw up a detailed explanation of the business’s worth. This explanation will give credibility to your asking price and can serve as a gauge for your initial listing price.
Decide Whether You Need a Broker
Finally, you need to figure out if you need a broker or not. Many would ask why you need a business broker if you can sell it yourself, and the truth is that there are several reasons. While selling it yourself allows you to get more money and save from having to pay the broker’s fees, the broker can get you free time on the more complicated aspects of the sale. They can also help you get the highest price, find the best buyers, and allow you to keep your business up and running in the meantime.
This is far from a comprehensive list of things that you should do when considering if you want to sell your business or not, but it can certainly help get you on the right path. With tips like these, selling your business may just turn out to be a simpler endeavor than you think.
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