Selling a company is not an easy task. Many are only confronted with this situation once in their lives. They have to give up the company they invested lots of energy, time, and money in building from the ground up. Naturally, you don’t give away your life’s work lightly.
However, due to one reason or the other, we may opt to sell. Two key questions to ask are; how do you get the right value for your sale? And how do you go about the process? This article will answer this and more with the following things to take care of when selling a business.
Know your reason for selling.
Understandably, you might need some expert guidance to determine your business’s worth. However, before evaluating your business, it’s imperative for any business owner to take a step back and ask the vital question ‘Why do I want to sell my business?’
Do you want to raise capital for another venture? Or to bail yourself out of a financial situation? Or maybe you’ve received an irresistible offer for your business from a prospective buyer? Whatever the situation might be, ensure your reason for selling is clear. Reflection on the main reason for selling opens the room to pertinent issues that would make way for a smooth sale.
To take the next steps, you’ll likely need assistance from financial experts like PPE Companies. Their investment banking, property valuations, and financial advisory services will likely come in handy. A company like this can also carry out a detailed valuation of your business, answer all your pressing questions, and guide you to make the right decisions depending on your financials and other criteria.
Know your business’s worth.
As a seller, you must target the right buyer who will offer the right amount of money. Once again, you’ll likely require expert assistance to help you make an apt valuation of your business, as well as select the best price. They can also help you find the best prospective buyer on the market.
Keep in mind that all these services won’t come for free. As such, it helps to have a budget in place. Some brokers might even seek a commission in the form of a percentage of the sale price of your business. This is not such a bad idea, as it will motivate the broker to push for the highest price from any potential buyers.
Keep your books in order.
It’s of prime importance to make sure all documents regarding your company are up to date and properly detailed. This includes the regulatory, publicity, and most especially, financial documents. Having your books in good order is key to making or breaking your sale.
Periodic financial reports and projections should be properly organized, secured, and readily available. And if all your documents are held in cloud storage, good cybersecurity service from companies like CastleLock is imperative. Whatever your economic status or level of expertise, companies like this offer customized or generic data security services using the latest cutting edge technology.
How much will you earn?
This is the final and most important section. As a business owner, you must know how much money you’ll make. It’s vital to know that what you finally earn is a huge slash from the selling price and you must make the right plans to maximize your earnings.
First, you’ll have to deduct the percentage of the business broker (if you choose to use one). Then comes the consultant and third-party fees. And don’t forget the ever-present tax returns and auxiliary expenditure that you’ll incur through the entire selling process.
All in all, a business sale is a hectic process. It’s certainly not as easy as selling things on an online marketplace. That said, if you do your homework well and follow all the above tips, you’ll surely get the best deal done.
Also read: Signs It Is Time To Sell Your Business