Selling Your Business for Lower Stress and Higher Profit
|Gina Blitstein combines her insight as a fellow small business owner with her strong communication skills, exploring topics that enhance your business efforts. That first-hand knowledge, matched with an insatiable curiosity to know more about just about anything, makes her a well-rounded writer with a sincere desire to engage and inform.|
Selling Your Business for Lower Stress and Higher ProfitTYPE html>
At some point in the lifecycle of a small business, its owner may flirt with the idea of selling it. Perhaps she’s ready to retire and turn over the reins to a new owner. Maybe she wants to relocate but the business serves a local clientele. Does she want to liquefy her main asset so fewer of her financial "eggs" are in the same basket? The business could be closed and she wants to sell off the physical assets of the business. Is she embroiled in a conflict with business partners? Divorcing or experiencing a health issue? It could be that she simply wants to do something else. These are all valid reasons for putting a business on the market.
Generally speaking, taking time to clearly plan your "exit strategy" will result in a higher selling price and an allaround more satisfying experience for you. Bear in mind, It can take up to a year from the time it goes on the market for a business to sell. When you first feel the urge to sell your small business, consider a few questions early on, like:
Having these issues well thought out ahead of time will help you to more easily take on the enormous undertaking that is the selling of your business.
Some early preparation of reports and documents potential buyers will expect to see is prudent so you’re not scrambling to assemble it on the fly. It’s recommended that at least three years of financial records should be attheready. Then, it’s time to determine a fair selling price. To arrive at a reasonable valuation, you’ll want to do some market research to get a rough idea of the price businesses similar to yours are selling for; then consult with a business appraiser or broker to finetune your asking price. These professionals can help you represent the financial health intricacies of your market, including past trends, current standing and potential future growth. They will also advise you on specific documentation to complete for potential buyers to examine. Having your "ducks in a row" with regard to recordkeeping and document presentation can only make a favorable impression upon potential buyers, giving them the impression that the business they’re looking into is a desirable, welloiled machine.
Of course, you’ll eventually need to tell your employees about your plans to sell; but telling them too early may cause some to abandon ship. You don’t want a mass exodus when you’re trying to keep things running smoothly while you make early preparations to put your business on the market. Once you’re in a serious negotiation with a buyer, introduce your employees. They may even be interested in retaining present employees.
Likewise, customers may be scared off by tooearly reports of a sale. They may be so used to doing business with you that news of you selling rather than a "wait and see" reaction will set them running. This is not the time to lose customers, either, as you want to hand off a thriving business to its new owner.
In addition to helping you prepare your business for the market, business brokers can help identify opportune timing for putting your business on the market to optimize your chances of selling for topdollar. They can help you weed out serious buyers from lookyloos who will only waste your time. At a potentially emotionallycharged time when you’re selling a business you’ve nurtured for years, a broker can provide clearer perspective and decisionmaking. But don’t hire one without a thorough interview first to ensure they’re a good fit. It’s best if they’ve worked with businesses similar in size and industry to yours, have a reasonable amount of experience and a strong sales record. Find out if they are certified in their field and if they work as part of an organization or freelance. If all that checks out to your satisfaction, discuss in detail how they can and will benefit the sale of your business. Be certain to communicate the degree to which you wish to be involved with the sale of the business, lest you feel steamrolled by your broker.
When it’s time to sell your business regardless of the reason these tips can help you get through the experience with greater ease and a higher selling price.
Are you thinking about selling your business?
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