After much thought, you’ve finally decided to make the move and sell your business. It’s a given you want this process to be as smooth as possible. Below are some valuable tips to keep in mind as your South Florida business sale approaches:
After much thought, you’ve finally decided to make the move and sell your business. It’s a given you want this process to be as smooth as possible. Below are some valuable tips to keep in mind as your South Florida business sale approaches:
Do’s to Selling Your Business
Pay Attention to Your People
- Make sure your key employees are happy, particularly middle management
- In the ideal circumstances, the employees should be able to run the business without the owner. Consider what changes can be done now to move closer to this model
Be Presentable
- Do freshen up your business facility to give it curb appeal
- If there is production equipment, clean the machines or paint the covers if they are worn
Get Your House in Order
- Do everything you can to increase sales and maximize profits. This is one of the main drives of value
- If you are a C corporation with retained earnings, talk with your financial advisor about taking this as a dividend by 12/31/12, pay your taxes, and loan back the money to the corporation. This is to avoid the higher tax rate which is almost certain to occur after 12/31/12, as Congress tries to balance the budget
- If you are using Quick Books, consider having your CPA prepare your year-end financial statement for the prior full year
- If your sales are trending down do what you have to do, and reverse the trend. For a buyer to qualify for a SBA guaranteed loan, sales must be at least flat, or be in an upward trend for at least three months to qualify
- If you offer open trade accounts to your customers, make sure they are brought current and/or write off those accounts that are uncollectable. If a buyer can see a substantial amount of the A/R over 60 days, it will cause concern about the quality of your customers and sales
- If you have any customers that represent more than 10% of total sales, add new larger customers to reduce this one large customer’s sales ranking. This could diminish the value of your South Florida business because of the added risk of this one large customer. When a buyer presents his package to a lender this issue will cause concern for the lender
- Sell off at a discount and reduce old inventory that has not sold
- Hire a professional to walk you through the process of selling your business
If you would like a coach for any of the preceding, Dolan has had many years of experience as an executive with international franchise companies helping owners work through these types of challenges, as well as being a business owner himself. Call for a free, confidential, no obligation consultation.
Don’ts to Selling Your Business
- Don’t sign a new long term business premises lease if you can avoid it, explore short term extensions.
- Don’t purchase or lease any large dollar amount of equipment unless it is really needed to maintain and grow the business.
- Don’t change from a C Corporation to an S Corporation without consultation with a qualified financial professional; explaining your plans to sell your business sometime soon
Selling your business can be a tricky and tedious process. With these tips in mind, make sure you are working with a professional and knowledgeable South Florida business broker to ensure a smooth and successful business sale.