There is no need to wait until you decide to sell a business to begin focusing on maximizing its value, especially in view of the expected turbulence in the commercial market.
Working toward your goal
You will be in the most favorable position for determining what your business is actually worth if you create a venture that can function well without you, that is, run on autopilot. This is the case whether your business is a start-up, or you have been in operation for several years.
Once you have accomplished this, you can choose among several options. You will still be able to realize a profit and be free to live the life you choose.
You can also retire without taking the step of selling a business, because it can be a source of continuous residual income for you, even when you are no longer involved in its day-to-day operations.
What you should know
Your business will also be more appealing to prospective buyers if they realize that its success does not depend on your efforts and input. They will also be relieved to discover that a transition period will not be required after you close the deal. Try to make the transfer as simple as possible, which will make it appealing to experienced investors.
Preparing to sell a business
Most authorities on the subject will tell you that preparation is essential in maximizing the price, and you can do this long before you set a date for selling a business.
For example, you may have an impressive list of clients, but not have any formal agreements with them. In addition, those on your staff may have the legal status of being self-employed.
Whatever the case may be, every action must be performed ethically and legally in order to stand up under the scrutiny of due diligence when the times. You can also make an effort to reduce unnecessary expenses to improve your bottom line.
Many business owners feel that if they take the step of putting a business on the market, that will have a demoralizing effect on their employees, suppliers and clients. They are also concerned about the way in which their competitors may react because they have know to pose as potential buyers in order to uncover important, confidential information.
In this case, maintaining confidentiality is definitely the key to avoiding such problems.
Working with a commercial broker
You can also work with a business sales agent, which should not be difficult to find when selling a business in Australia. Many of these professionals specialize in a particular industry, and they are experienced in reaching prospective buyers and using appropriate advertising that leads to a sale.
However, be aware they some brokers might try to lure you into hiring them by suggesting an unrealistic sale price as a result of their efforts.
Finding the right buyer for your business
Avoid the common pitfall of becoming so intent on finding a buyer that you hesitate to ask pertinent questions about their finances or do the necessary research prior to signing a contract. It only costs $50 to do a credit reference, and the money will be well-spent.
If the buyer wants to pay for the business with the bank loan, ask to see the offer letter they received from the bank. (A serious buyer will understand why you have questions.)
Also, when selling a business, the sale doesn’t necessarily have to paid for in full at once. You can always sell a portion of the equity initially and then accept the balance over a set time period, in order to complete it to your mutual satisfaction.