As a business owner, only you know how much effort you’ve put into raising it from just an idea in your head to seeing it function.
There’s no better person than you who knows how to run your business best.
Running a business is such a significant investment of time, money, and resources and you’ve certainly put in a lot of effort to make it work – from figuring out your payment provider to hiring employees and getting your inventory in order.
However, for whatever reason, you no longer wish to run your business and would like to sell it.
In this blog post, we explore some of the steps you need to follow in order to sell your business smoothly.
1. Get your finances in order
This is one of the first and most important things you can do for your business when you’re in the process of selling it – getting your finances in order.
When doing so, it would be a good idea to sit with your accountant and prepare all the documentation a potential buyer will want to look at.
This could include cash flow analysis, profit statements, contracts, intellectual property agreements, employment contracts, expenses, ROI analysis and others.
2. Create an exit strategy
If you’re the cog and wheels behind your business operations, it might be time to start loosening the reins.
Hanging onto your business is not a good idea during the time of sale and you should consider training your employees to run the place without your help, input, or assistance.
This type of exit strategy will help your business run like a well-oiled machine on its own, and this will ultimately make it easier to sell.
3. Get a business valuation
Much like buying a home, a business valuation is an excellent way of finding out the true value of your business.
Approach the professional brokers who deal with business valuations for their opinion to get an estimate.
Another area to keep in mind is the expenses that you take on.
For example, if you plan to sell within the next 12 months, is it worthwhile investing in new equipment or inventory?
4. Market aggressively
There are various ways of marketing the sale of your business and if you’re in a hurry, you should consider aggressive marketing.
There are several options for you to consider.
Firstly, work with a third-party who will approach potential buyers on your behalf, letting them know that your business is up for sale.
Secondly, consider advertising that your business is for sale within your industry.
Finally, advertise outside your industry as you might find a suitable buyer in the most unlikely places.
5. Screen potential buyers
To save yourself and your buyers time, it’s essential to screen them correctly.
In most cases, purchasing enquiries will come via email so you should be ready with a template that asks your buyers about their financial liquidity as well as their net worth.
Another crucial element is the signing of a Non-Disclosure Agreement.
This will help boost confidentiality and eliminate buyers who aren’t serious or don’t have the financial means to purchase your business.
6. Accept an offer and close the sale
Selling your business won’t take place without your acceptance of the best offer.
When choosing your buyer, make sure they have a solid financial history, sufficient liquidity, and some experience in your business’ field.
Once you’ve narrowed down your buyer, close the sale.
Here’s when you’ll need an attorney or broker or even both to help you navigate the necessary paperwork.
Selling your business doesn’t have to be a complicated endeavour once you have a clear strategy in mind.
By following these six simple steps, you’ll be well prepared in the process of the sale.