There may well come a time in the life of your small business when you have decided that you would like to sell it – many entrepreneurs do, after all. There are many different reasons why you could choose to do this, but when you do, it is vital that you have taken steps to ensure that the sale is a successful one. With that in mind, here are a few of the main steps you can take along the way.
Work Out the Reasons for the Sale
First up on the list, it will be worth having a clear set of reasons in mind for why you want to sell the business in the first place. This can drive you towards knowing whether you need to make the sale quickly or hold out for the perfect deal. Also, it can influence whether you are looking for somebody to continue running the company or you are happy for it to be split apart.
Give Yourself Time
While there are going to be some occasions in which you will want to make a sale very quickly, you are ideally going to give yourself enough time to ensure that you have gotten all of your ducks in a row and are fully and properly ready.
As well as getting your business affairs in order, this time can also be significant from a personal point of view, as you will eventually want to think about how your personal life will be impacted after selling your company.
Are you retiring? Are you starting a brand-new business, or are you going to work for someone else? Plus, how will your family life be affected by the change? These are all aspects to ponder as you take your time selling your company.
Think About Using a Broker
It will also be worth looking into the major pros and cons of using a broker or not. For instance, let’s say you own an accounting firm and you are ready to sell it. In that case, one of the significant advantages is that brokers with experience in this business type are likely to have specialist knowledge of selling an accounting firm, such as accounting practice value and other important aspects. This is the same for whatever kind of company you want to offload; brokers have expertise in your industry and can help you bag a successful sale for the right price.
Of course, on the downside, there are bound to be some expenses you will incur, so you need to consider whether it is worth it. You may have to pay a fee to the broker, but all the time, effort, and hassle these experts save you can be worth every penny when it comes to the challenges faced when selling a company – it’s not the easiest process, after all.
Set the Valuation
The firm’s valuation will be a tricky balancing act between ensuring that you have thought it all through in detail without overvaluing it and putting yourself in a situation in which you are simply unable to sell it. Ultimately, it would be best if you took the time to get this figure clear in your mind.
You also have to remove emotions from your sale – many business owners form an attachment to their company, which is natural. However, it can lead them to overvalue their own firm, thereby scaring off buyers with an overinflated price. Again, that’s where a broker can help – they have no emotional investment in your business and can therefore calculate a fair, realistic value without hindering the sales process.
Prepare the Documents
You will likely need a whole set of documents for the sale and business ownership transfer, so take the time to ensure that you have all of these in order. The better and sooner you do this, the more likely it is that everything will go through smoothly and without a hitch.