Whether it’s a loss of interest or due to financial reasons, small business owners often come to the decision to sell their business. If you’re interested in putting your business on the market, explore these helpful tips to ensure you do it efficiently and profitably.
1. Get an Independent Valuation
A third-party valuation is essential to the selling process. It’s often very difficult for a small business owner to reliably value their own business. There may be things you simply aren’t seeing about your business that are relevant, and you may be too emotionally attached. As noted by Fair Market Valuations, most investors will want a third party valuation before the purchase of the business regardless. The valuation will simply let you plan ahead.
2. Only Entertain Serious Offers
You shouldn’t put any data out to anyone who isn’t serious about the purchase, especially if you are a sole proprietor. There are many parties that may claim to be interested but aren’t seriously invested in the concept of purchasing your company. Otherwise, you may simply be wasting your time.
3. Don’t Sell Your Business Quickly
Avoid selling your business simply because you’re under pressure to do so. Selling a business too soon makes you more vulnerable to deals that are not in your best interest. If you’re selling your business because you have run out of capital, you may want to consider getting investors instead. You could end up selling your business just as it has begun taking off, and cheating yourself out of the fruits of your labor.
4. Use a Broker
If you aren’t experienced in the art of business sale, Investopedia suggests that you use a broker. Brokers are experts at selling businesses and can ensure that you get the best possible deal for your company. While you will need to pay the broker a commission for their time, you will also be able to focus on the business itself during the time its on the market. That can increase your personal revenue and offset any potential costs. Using a broker is also an excellent way to ensure that you’re protecting yourself, since a broker can provide limited protection for your personal information by acting as a middleman throughout the entire transaction. Take the extra steps by investing in a comprehensive solution geared towards protecting your SSN and personal financial accounts.
5. Set Your Exit Strategy
As mentioned in Entrepreneur, potential suitors for your business will want to be able to see that it has a bright financial outlook. To facilitate this, have your own exit strategy in place. If your business relies too heavily on you, prospective buyers will see this as a red flag. Instead, create a business environment that can sustain itself as much as possible in the hands of a new owner.
Selling a business can be stressful and exciting at the same time. The sale of a business involves large amounts of your time and money, which can easily cloud judgment and make decisions difficult. As important as it is to find the best deal, it’s equally important to recognize that it is the best deal that you can get and secure it as soon as possible. Many small business owners may end up sabotaging themselves by holding out for more than they can realistically expect.
