Selling a business requires careful planning. You may feel as if you have countless responsibilities which do not only include ensuring the sale takes place but also to get the best possible price for your business. Knowing why you are selling, when to sell, and for how much is critical.
Did you know, however, that there are additional things to consider? For example, planning sales and marketing push once you have developed an exit strategy could make your company much more attractive to buyers. You also want to know your market, your competition, and other location demographic information before you get started with the process.
Never hesitate to meet with your business law attorney to ask your questions first! He or she will be able to share valuable insight to help you navigate the sale of your business. In our blog today, we want to get you started by sharing five basic sale tips that we tell our friends, family, clients, and business partners.
1. Why. Know exactly why you want to sell. Get to the heart of your goals and be clear. Overworked? Time for a change? Retirement? This is usually the first question a prospective buyer will ask, and other selling decisions often usually stem from your “why.”
2. Valuation. How much is your business worth? It is not always what the seller thinks, but what the market will pay. Consider obtaining a third-party evaluation to ground your asking price. That does not mean you have to go with that price or that you have to disclose your research during a negotiation. An independent evaluation can help avoid asking too much or too little and even identify areas to improve upon.
3. Timing. Selling a business at the right time can make all the difference. While macroeconomic factors are largely out of one’s control, there are many things that can be built into an exit plan to seize the moment when an ideal time presents itself. Cleaning up financial statements, eliminating potential red flags, and transparently accounting for all income and liabilities are just a few suggestions.
4. Expertise. A broker can lend his or her expertise for a price. Whether you are selling on your own, or through a representative, do not wait to consider an impartial representative and discuss this option with your business law attorney.
5. Buyers. When fielding offers, find out whether a potential buyer is serious before giving out any information about your business. Do they have the means to buy? Develop a short list of top pre-qualified prospects, allow for some wiggle room, and stand firm on your asking price while building in your company’s future value.
Selling a business is a big “next step” for any of us. We know just how complicated this can be for you and your loved ones. Do not wait to contact us to ask us your questions on this or any other business related matters. We are your local law firm located right here in Dothan.