Selling your business will change your life. It is important to weigh all of the options and factors before you decide to sell. Buyers will want to know the answers to many questions, so prepare truthful answers that will not jeopardize the success of the sale. Be prepared to offer hard evidence when asked. As a general rule, the best time to sell is when the business and your sales are peaking and the industry is likely to attract great interest.
Ask yourself the following:
– Am I really ready to sell, or do I just need a vacation?
– Have I considered other options, such as bringing in outside management?
– Why am I selling?
– Is this the best timing?
– Could the market and sale price be better if I waited?
– Will the sale benefit me financially?
– Can I survive financially without my business?
If you have answered these questions honestly and you are certain now is the time to sell, there are many things you can do to prepare your business for sale. Being that you are an experienced owner, think about the things you would like to see in a business if you were to purchase one. Close your eyes and try to picture your business the way a buyer would.
Some Recommended Actions When Selling Your Business
– House cleaning. The business itself needs to be physically clean, but more importantly “clean up” your financial house.
– Cut expenses for improved profitability at least 6 months in advance of the sale.
– Do what you can to strengthen your gross sales because a buyer will be concerned about the top line including total income and gross profits.
– Pay off debt. If you have credit card debt, loan liabilities or other liabilities you should focus on paying them off. When you sell your business your loans and liabilities will need to be satisfied by you. It will be more valuable to a buyer to purchase a debt free business.
– Make smart human resource choices. Are all of your employees and positions necessary? Are they performing and behaving in a way that is in line with your company culture and mission? When a buyer purchases a business they may also be inheriting the staff. It will be a much more attractive sale if your team is motivated, hardworking, performing proficiently and inline with the company’s goals.
– Sell when the company is in an upward motion. If you have a better season, plan to sell when this will be evident to a buyer and make the business’ sale price higher.
Most importantly, consult with professionals, including your accountant, financial planner or adviser and attorney. The associates at Numerico will educate and guide you through your financial documents and financial situation for the present and future. Jay and his team are experienced in selling businesses and all transition and succession planning.
After answering these questions and getting your business in tip top shape, it is also important to price your business right and have a plan for what you will do after you sell. Numerico is here to serve you in whatever ways they can and consult with you through this very important decision. They will advise you and help you to get the most you can for your business!