Selling a business can be both emotional and stressful, since it involves parting ways with something that has been part of you for so long.
Preparing to sell requires getting professional valuation services on board to assess the value of your company and give your asking price credibility.
Find Potential Buyers
When selling your business, finding qualified buyers who are committed is paramount to its success. Working with an experienced business broker or mergers and acquisitions intermediary is often the key to doing this successfully.
These professionals can utilize their wide network of connections to find buyers for you and handle inquiries without publicising or listing your company for sale. In addition, they can assist in screening out insincere or unrealistic prospects.
Ideal, all prospective buyers should sign a non-disclosure agreement before receiving information about your business from you. In addition, request that they submit financial statements and resumes.
Make sure that the potential buyers have experience or at least the ability to quickly learn about your industry, otherwise they may struggle with understanding your business and may not be able to successfully run it after the sale, potentially jeopardizing its profitability and your bottom line.
Prepare for the Sale
Selling your business can be an emotionally charged experience. Many owners have spent years building their companies and may feel as though something will be left undone when the sale concludes. To handle such emotions with care, extensive preparation must be conducted beforehand as well as having an established support network in place.
Prepare for your sale by creating a confidential information memorandum (CIM), providing high-level details about your company to potential buyers. It would also be prudent to create an electronic data room so interested parties may review company records and documents at their leisure.
Make an investment in your company now to increase its value as a seller, find buyers for it quickly, and smooth over any transition issues afterwards. Taking proactive steps before selling will also ease both transitions for both parties involved.
Negotiate the Sale
As you prepare and ultimately sell your business, you may work with various professionals. These may include a CPA firm which performs your audit, handles payroll processing and prepares business tax returns; an attorney who reviews contracts and sale agreements; and an expert valuation provider to help establish its value.
Most business owners work with a broker and wealth planner when selling their company, who will assist with the sales proceeds investments.
Negotiations requires compromise; when giving concessions it is crucial that something in return comes your way.
Be ready to explain why you are selling your business. For instance, if you feel burned out by running it yourself and need help restructuring it instead of hiding this fact during negotiations – as lying can damage its reputation and could jeopardise its sale.
Close the Sale
Dependent upon the size and complexity of your business, legal assistance may be required in closing its sale. To make things go as smoothly as possible for both you and the buyer, start planning for this before actually selling your company – an attorney can review and prepare all relevant paperwork including an inventory list, purchase agreement, and tax implications – making their services invaluable when selling any enterprise.
Before engaging with buyers for the sale of your business, it’s essential that you identify what goals are important for both sides. Common goals may include increasing profit for the seller while making sure employees remain protected during and post sale as well as guaranteeing a smooth transaction process.
Closing the sale involves conducting a walk-through of your business prior to its closing date in order to confirm that everything listed in your inventory and purchase agreement is present. Furthermore, this involves allocating expenses up to that point as well as exchanging money and keys.