Some business owners get caught up in the excitement and emotion of selling a business and can over look important steps, which can be costly.
Check out our infographic below which walks you through the 6 important steps of selling a business and insure that your selling process is a successful one.
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Selling your business privately
Whether you are selling your business privately or with a broker, it can be for several reasons, such as planning to retire, and you will want to proceed carefully and take the following steps:
Financial Records Are Correct and Updated
Be sure that your financial records are correct and updated, and be ready to provide pertinent information to your potential buyers. At the very least, they will want proof your company’s audited balance sheets and profit-and-loss statements for the past three years. Providing your lease statements and tax returns will also be helpful, along with current balance and payment schedule if you are paying off a business loan.
Consult With a Financial Analyst
Once you have assembled the documents mentioned above, this will give you some idea of what your businesses value is. In addition, you will probably want to consult with a financial analyst to determine its fair market value.
Deposit You Ask For Is Very Affordable
If you want to sell your business within a relatively short amount of time, make sure that the deposit you ask for is very affordable. You might also want to provide seller financing in this situation to facilitate the sale, and if you do, the buyer will agree to pay an agreed amount over an agreed-upon time period.
Grow Your Accounts With Special Promotions and Discounts
While your business is on the market, try to grow your accounts with special promotions and discounts, and be ready to provide potential buyers with required paperwork related to your employees and suppliers. Avoid any significant interruption in your day to day business operations as well.
Resolve to treat the acquisition of your business as a confidential matter. If they discover your plans, your customers and suppliers might think that you are in serious financial difficulty, which could reduce your sales volume. In addition, your employees may begin looking for another job and leave without waiting to see if the new owner is willing to hire them.
Develop a Good Rapport With All Potential Purchasers
Develop a good rapport with all potential purchasers, but remember to screen each one as well to minimize issues and complications. A competitor might even assume the role of a potential buyer to try and find out useful or private information about your business. In anticipation of this, ask your legal team to create a confidentiality agreement that you can use with interested parties who inquire about the sale.
Remember that selling a business privately can save you quite a large amount in agent commissions, it really isn’t hard to do and potential buyers usually prefer this method. To sell a business privately, advertise on commercial websites and in your local newspaper.