As an entrepreneur, it may come to a point where you need to sell your business. Perhaps you have considered this line of work or just want to venture into a different area. Maybe you don’t like what the future holds for you as a business or are moving into a different location. Despite the situation at hand, selling a business requires some serious thought and various considerations. This is, especially if you intend to make a profit from the sale.
In most cases, you will need to work with certain professionals. These include a broker, an accountant, and an attorney. Among other things, you will also have to think about your reasons for selling it, the timing, and your business’s strength when you are selling it. Remember, the last thing you want is to incur losses from the sale. In this piece, we will brush through a few quick tips on making sure you sell your business without losses.
1. Think About the Reasons for Selling
Once you have decided to sell your business, be ready to give potential buyers the reasons you are selling. Most buyers will want to understand why you want to sell your business to know the risks they are getting into or benefits to expect. However, you can always sell your business through an intermediary. As explained at www.comelli.net.au, selling your business through an expert dealer in commercial transactions provides various benefits. Some of these include the following:
- Less hustle during the selling
- Easy access to willing buyers
- Minimized responsibility with buyer inquiries
- Marketing for your business
- Save time and money
To add to this, many entrepreneurs will sell their businesses for reasons such as retirement, illness or death, boredom, or being overworked. The larger portion will put a “Going Concern” sign because the business is no longer profitable. With the latter as your reason, it can be quite challenging to sell your business at a profitable price. If you want to make something useful from the sale of your business, you can do the following to boost the chances that it will be bought at a profit:
- Increase the profits
- Focus on creating a strong customer base
- Have a contract that into years after you have sold
- Have consistent income figures
2. The Timing Matters
To make a good profit from your business’s sale, you need to start preparing a year or two before doing so. This helps ensure you have enough time to improve your financial records, customer base, and general business structure. If you effectively work on that, you can easily price your business at a value that will attract more willing buyers.
3. Conduct a Business Valuation
Business valuation is the process of determining exactly how much your business is worth. Selling at a profit begins by knowing how much the venture is worth. This means being careful not to price it so high or too low. For a credible business valuation, be sure to work with a professional appraiser. After they have done an in-depth analysis of your business, they will draw up a detailed document explaining your business’s worth. This document builds on the credibility of your business and its worth when negotiating for a profitable price.
4. Have All the Documents Intact
Your business might not be so valuable, but one thing is for sure. Having a plan to ensure that the buyer has a smooth time running the business helps negotiate a good price. One way to do this is to get all financial statements and tax returns in place. Have inventories listing all the equipment being sold with the business. Take the time and make a list of contacts of suppliers and other business partners that the new owner might want to utilize before he fully integrates himself into the business.
5. Finding a Buyer
Unless it is urgent, do not be in a rush to sign the first deal you get your hands on. It is a great idea to compare several potential buyers and their offers before choosing the one to pass your goodwill to finally. As earlier mentioned, using a reputed broker can take much of this weight from your shoulders.
Finally, you will have to make sure that everything is done under the law. This means involving a reliable business lawyer from the initial steps. After selling your business and making a profit, don’t forget to reinvest elsewhere. All the same, the few tips above should help ensure you avoid losses when selling your business.