When it comes to selling a business, there are a number of important aspects involved that will make the process a success. Whether the exit strategy involves selling the business to a new owner or converting the business into liquid assets, it’s crucial to know exactly what needs to be done. If you are a business owner who wants to ensure you get the best price when you sell, here are some tips that are guaranteed to make the process as successful as possible.
1Sell for the Right Reason
For many business owners, the biggest mistake they make is waiting too long before they decide to sell. When this happens, they not only lose tremendous leverage in negotiating a good deal, but they often bear the burden of having more and more stress in their lives. In order for this to not be the case, owners should look at selling their business much like they would if they were selling their house. By doing so, they’ll be able to tell potential buyers that they’re selling because they want to pursue new opportunities, rather than having to admit selling due to health reasons or a decline in sales.
2Using a Virtual Data Room
When an owner decides to sell a business, one of the smartest moves they can make is setting up a virtual data room provider. Used often in mergers and acquisitions, a VDR offers potential buyers an online source of detailed information about the business. However, what makes a virtual data room such a smart option is that it allows the information to be viewed in a secure and confidential area, while also being very cost-effective and efficient.
3Take the Assets into Consideration
Before a business is sold, the owner or owners should be sure to take all of its assets into consideration. For example, consider the physical assets of the business as well as other assets that are equally important. These can include trademarks and client lists, which by themselves can be worth a fortune to a new owner looking for immediate success.
4Know the Worth of Your Business
While it may sound like a common-sense request, the fact is many business owners who sell their company often do not know its true worth in the marketplace. To keep this from happening, it’s always a good idea to have a business valuation done prior to putting the business on the market. While legally anyone can do a business valuation, most companies prefer to use accountants that know how to properly determine an accurate valuation.
5Work With Professionals
Rather than think they can handle all aspects of selling their business, smart owners choose to work with a variety of professionals who are skilled in the process. In addition to using an accountant to place a proper value on the business prior to selling, a realtor skilled in commercial sales can help sell the business much quicker than if the owner attempts to do it on their own. And along with these professionals, working with a lawyer who has knowledge and experience in dealing with business sales can ensure nothing goes wrong, since they can draw up and analyze contracts and other documents prior to the sale becoming final.
While all of these tips can work together to make the sale of a business much easier than anticipated, an owner still needs to evaluate their reasons for selling and know they are doing so for the right reasons. By doing so, the sale will not only be a positive experience for buyers and sellers but a profitable one as well.