When you start a business, you might not immediately have a plan to sell it, but that can sometimes be the best thing to do. It could be that you want to retire, for example, or perhaps you have built up the business as far as you can, and you want to do something else – selling the business will give you the time and funds to start something new. There are a plethora of different reasons to sell a business, and it’s a wise idea to understand how to do it even if you don’t intend to do so for a while yet. Having the knowledge will ensure that it’s an easier process when the time comes. With that in mind, below are a few things to put in place if you want to sell your business.
Get The Timing Right
As with many things in life, the timing of the sale of your business is crucial. Ideally, you’ll want to wait until it is making a good profit and has a sizeable customer base because this will entice more interest and buyers.
Even if you feel you want to sell right now, if things are running smoothly or the books aren’t up to date and so on, it would be a mistake. Make sure you put everything right before you put your business on the market; waiting for the right time (when everything is done) is a much better idea than rushing.
Value The Business Correctly
As with anything you want to sell, if you price your business correctly, you’ll be much more successful. The absolute worst thing you can do is to value the business too high or too low. Too high and you won’t attract any interest; too low and either people will be wary because they think there is a problem with the company, or you will sell it, but not make as much as you might have done. Of course, if you have to sell quickly, this might be an option you are open to.
In general, however, you’ll want to ensure you have valued the business correctly. This means taking into account every element of it, from the turnover and profit to the assets it owns, which can include a variety of different things, such as vehicles or plastic welding machines. Valuing a business can be tricky, so it can be a good idea to have an expert do it for you. They will also be able to market your business and find potential buyers, and although you’ll have to pay a fee to a broker like this, it’s a much easier and quicker route to go down if you want to sell your business.
Check Your Paperwork
Paperwork is a vital element when it comes to selling your business. This is why most potential buyers will want to see, and without all the relevant documents, not only could you risk losing a sale because the buyer is unsure of what they are actually buying, but you might also find that you have legal issues to deal with as well. This is why it’s important to get your documents together before you put your business up for sale.
These documents include:
- Tax returns
- Bank statements
- Employee contracts
If you’re feeling unsure about any of this, ask your accountant to get things ready for you, as he or she will be in the best position to do so.