When you’re selling your business, you need to be properly prepared. Failing to prepare for the sale of your business will ensure a low sales price. Continue reading this article to learn five tips for selling your business.
Before you get into the following tips, you need to make sure you take the emotions out of the process. It is understandable that you have emotions taking place when you’ve built your business from the ground up, but your emotions won’t serve you in this case.
Table of Contents
1. Work with Legal and Financial Experts
You know you’re great at growing your business. You’re great at putting strategies into play and making sure the day-to-day is running well. You may not be a financial and legal expert, and it is unlikely that you know all of the finance and legal clauses you need to understand.
Consult with professionals that have done work with similar companies. Finding experts that are legal professionals in your specific industry will allow you to get the best results. You would be surprised at how specific of an industry niche you can find professionals.
As you go through the process, there could be issues that come up, but you need to make sure that you have a legal professional on hand. It is very helpful when they are already up to speed on your business and how they can help you through the process.
2. Non-disclosures
When you start to talk about selling your business, everyone needs to sign non-disclosure agreements. If you don’t get people to sign non-disclosure agreements, you could end up with a leak. You want to keep the sale of your business as quiet as possible.
Preparing to sell your business years in advance is the best practice, but you don’t want the news to get out to the public. If your shareholders or employees find out about the potential sale of your business, they may get scared and start looking for an out.
Keeping the sale of your business quiet will enable you to keep your business running properly instead of worrying about your employees making an exit before the sale.
3. Work with a Professional Business Broker
Business brokers sell businesses on a daily basis and have a Rolodex of people that are interested in buying businesses. Since you may not know people interested in purchasing your business, it is helpful to have these resources.
A business broker also helps you keep up with your day-to-day operations by taking care of initial meetings and fielding potential buyers before you come into the equation.
When you work with a business broker, they are likely to have advice that can help you from the start to the finish of your business sale. Make sure you talk to multiple brokers before making the decision to hire them. You will be working with them closely, and you want to make sure they know what they are doing and that you work well together.
4. Understand Your Company’s Value
Valuing your company is a necessary part of the process. You should get the value of your business as soon as possible so you can see where you are now. When you know where you are now, you can start working on areas of your business that might need improvement.
You can use the small business valuations calculator on Valuator to find out how much your business is worth. There are many ways to calculate how much money your business is worth, but some are more favorable than others depending on your circumstance.
If your business is growing and flourishing, you need to look at more than your business’ assets. You should look at your business assets as well as its potential to generate a profit in the future. Some formulas will make it easy to figure out the value. Having a professional take care of this process is often the choice of many busy owners.
When you know the value of your business, you have a great starting point for negotiations. While you might set a price for your company, you should be willing to negotiate if you want to sell your business. Depending on your motivation, your business might sell for more or less.
If your business is in trouble and you need to sell quickly, you are likely to get less money. On the other hand, if you can hold out for the right offer, you are going to get more money for your company in most cases.
Do your research and analyze what other companies similar to yours are selling for. For example, you can look at businesses for sale in Canada through online marketplaces. These platforms can help you find and analyze options quickly by compiling, curating, filtering, and adding meaningful business data from multiple industry sources. This ensures the results match your interests, budget, location, and desired industry.
5. Get Your Offers In Writing
If your business is popular and you get multiple offers, you want to have them down on paper. If you don’t have your offers down on paper, it is more difficult to compare them to see which offer is going to be the best for your company.
Price may not be the only thing you want to look at when it comes to these offers. There could be other terms and conditions that make an offer a deal breaker even when the offer comes in higher than the others.
Getting the Best Selling Price Out of Your Business
Following the preceding tips will help you get the best price for your business. The preparation stage of selling your company may not be glamorous and exciting, but it is necessary if you want to get the money you deserve.
About Carson Derrow
I wanted to thank you for this advice for selling a business. You mentioned that you should try to get the value of your business quickly so you can see areas that might need improvement. This also seems like a good chance to see what value other companies have to get an idea of what the industry is like.