Selling your business isn’t an easy job. You have to take care of different matters, and consider every factor deeply. In business selling, you need to contact different people i.e. brokers, accountants and consultants etc. Business selling requires a smart approach with proper timing to get more profit.
How to Sell your Business?
Here are the significant points to consider while selling your business.
Why Do You Want to Sell Your Business?
If you’ve decided to sell your business, there must be a reason behind it. Why are you selling your business? This question will be asked by the buyers. Your reason for selling will give them the reason to buy. So, it is important to give a strong answer. Usually, seller comes up with following reasons:
- Partnership issues
- Retirement from Work
- Death or Illness
If you’re thinking that your business is not making profit. Such a reason could be hard to attract potential buyers towards your business. So, make sure to define a solid reason for your buyers. Reasons should be attractive and catchy.
Best Time to Sell your Business
Selling your business needs proper planning. You should find out the best time to sell your business with a complete strategy. Complete exit strategy is important to get your business sold with good profit. All of your financial records should be maintained. Furthermore, your business must have a good market reputation. Selling your business doesn’t mean to let it go down.
Business Evaluation is Necessary
Before selling, make sure to determine your business worth by yourself. It is necessary to make sure that you’re selling not too high nor low. You may also get the services of some business appraiser for its valuation. S/he will check and point out the details for your business. These details will help you out on selling the business at the right price.
Why should you Hire a Broker?
Hiring a broker means you’re getting assistance from someone who is expert in selling the businesses. S/he knows the market areas and may provide you real time assistance and potential buyers. Brokers will not just help in selling the business but also support you in finalizing the documentations. They’ll explain your business strategies to buyers and will also help you out in covering the hidden areas.
But if you don’t want to sell your business through some broker. You’ll save money that is required by the broker for their commission. It is possible if you’re selling business to someone you know earlier. Else it is best to hire the broker and get the process done smoothly.
Time to Prepare Documentation
We’re discussing the business for sale tricks, therefore we should not neglect the documentation. Selling means you have to handover the things to the buyer on finalizing the deal. So, simply collect your business financial statements along with your tax return. Collect these files from the accountant and review them properly. You also have to draft a complete list of equipment, and sales, transections along with the supplies. Keep the information prepared and provide to the buyer on demand with a detailed business manual.
Find out the Potential Buyer
Business buyers should be searched in the market. Nowadays you may also search the potential buyer at online business for sale listings. Place an attractive advertisement for potential buyers and get the right one for you. Here you have to take of following points:
- Be responsive to your potential buyers
- Check if the buyer potential with pre-qualifies for making purchase
- Avoid to get in touch with deal breakers
- Pricing should meet the business worth criteria, although you may get some space for negotiation
- Proper confidentiality/nondisclosure agreement should be written and signed by the buyers
Why Buyer’s Pre-Screening Necessary?
If your advertisement doesn’t contain any detailed information. It may waste your time by contacting every type of buyer. So, make sure of the pre-screening of your potential buyer. It is necessary to avoid any future issues. You may ask them to respond to the important questions i.e. why they’re interested in purchasing? What is their financial capability? etc.
If you’re selling through some broker, you may ask them to get the answer of these questions before sharing any confidential business related information. Business for sale advertisements may attract a lot of buyers but prescreening will allow potential buyers to get in contact with you.