Best Practices for Getting Your Business Ready for Sale

Selling Your Business?

Best Practices for Getting Your Business Ready for Sale

Use this guide to help you in getting your business ready for sale.

There are many reasons why people sell businesses, from cutting your losses to cashing out and growing your wealth. Whatever your reason is, you'll need to understand the art and science of getting your business ready for sale.

Having an up-to-date valuation for your business is essential if you're planning to make a sale.

Getting your business ready for sale requires a diligent, scientific approach. 

Learning how to sell a business includes making sure you're handling everything on the legal front while also maximizing your profits in the sale. 

Not sure you're quite ready? No problem! Keep reading for seven tips that will have you feeling like a pro in no time. 

1. Get a Professional Valuation For Your Business

Having an up-to-date valuation for your business is essential if you're planning to make a sale. 

During a business valuation, a credible third party will break down everything from your marketplace value, cash flow potential, and how much you can expect to make in a sale, to an in-depth look into your strengths and weaknesses. 

Accountants or investment bankers will make your valuation as accurate as possible. 

2. Shore Up Any Red Flags and Make Improvements

The last thing you'd want is to give a prospective buyer any reason to balk at buying your business. Be sure that you audit your business for any red flags before moving forward with the sale. 

This means getting rid of any liens or tax issues, and ensuring that ownership is crystal clear. Settle any outstanding balances and legal issues so that they don't bleed into the sale. 

3. Be Clear on Your Intentions For Selling and What You Hope to Gain

Everyone has different reasons for selling their business. Never move forward with the process unless you're clear on your intentions and goals. 

For instance, you might sell the business to retire, dissolve the business during a dispute, or get an influx of cash flow. When you know your goals on the front end, you'll be able to get the results you're looking for. 

4. Analyze and Clean Up Your Books

Without question, your books need to be in order if you're going to sell your business. 

If you don't have clear financial records, no credible buyer will take the chance of purchasing your company. You'll need to have up-to-date books from the past three years, in addition to tax records. 

Piece together your reports and have copies available to buyers. 

5. Put Together a Financial and Legal Team to Facilitate the Sale

In order to get the best from your business sale, you'll need the backing of financial and legal professionals every step of the way. 

Make sure that they specialize in mergers and acquisitions, and that you use M&A analytics tools for due diligence. In the meantime, ensure that you're staying on top of your business matters so that your company doesn't falter while you wait for the sale. 

Follow These Tips When Getting Your Business Ready For Sale

Getting your business ready for sale requires a diligent, scientific approach. 

Using the strategies listed above will help get the end result you desire.

Looking for more professional help? Reach out to learn more about how to get your business ready for sale on your terms. 

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PREPARING TO EXIT YOUR COMPANY

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Top 3 questions to ask a business broker in 2019 to sell a business

Business owners often make huge mistakes by attempting to sell their business on their own when not prepared to do so. What’s worse? Choosing the wrong business broker to sell your business because you weren’t prepped to ask her the right questions. Here are our top three questions to ask a business broker before selling your business in 2019:

1) How many businesses have you sold as a lead broker on the sale?

Resumes mean little, completed transactions mean everything. Get a list of completed transactions the broker has led in your industry, in your area, in your approximate deal size… everything.

2) Who is my potential target buyer?

Make sure the broker has a good plan for selling your business, and a reliable list of active buyers she plans to market the business too. Will she market individual buyers? Investment groups? Strategic competitors in your industry who might be actively looking for acquisitions?

3) Do you co-broker?

This is a big one business owners often miss when hiring a business broker. If a business broker will not agree to co-broker you might want to run for the proverbial hills as a potential seller looking to maximize interest and offers within a limited amount of time. A broker who refuses to co-broker (work with and share commission) with another professional representing a buyer who might be interested in your business is essentially limiting your selling opportunities in order to protect their own commission. We believe business brokers have a clear fiduciary responsibility to maximize interest, offers, and speed on behalf of their seller clients, to ensure the highest price and best terms for any business owner who has entrusted them to sell their business.

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.