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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The Best Exit Strategies for Your Business

Top 4 Tips To Exit Your Business

Best exit strategies for your business

Is it coming to the time when you can no longer run your business? It's important to have exit strategies planned. Whether you're looking to retire, get out of an industry, split with partners or just don't want to run your business anymore, proper exit strategies are a must. Getting the help of a business mediator can be an incredible value-add if you're looking to exit a business where that may get sticky with existing partners.

Subsequent comprehensive studies can cost you upwards of $35,000 depending on the size of your business and what type of player you intend to sell your business to (private equity or family office, for example). Consider How You're Going to Sell, Transfer, or Liquidate the Business and your Ownership Interest. Many people seek exit strategies not just to get rid of a business, but to start a new professional and personal lifestyle.

Exit strategies are absolutely necessary when you're making a transition with any business.

By finding the strategy to help you in this regard, you'll create a clean transition that is beneficial for whatever your step is. Let's take a look at a few strategies that'll help you out. 

1. Explore Mediation if You Have Partners and Want Out

Getting the help of a business mediator can be an incredible value-add if you're looking to exit a business where that may get sticky with existing partners.

They'll work with you and the other parties in your business to be sure that you're able to leave the company and dissolve your ownership in a way that works. This can include facilitating settlements, scheduling meetings, and conference calls, and helping to maintain privacy and cooperating during mergers and acquisitions. 

By touching base with some third-party mediators, you'll be able to engineer the best agreement for your company's needs.

2. Have Your Business Properly Valued

There are an exponential number of candidates out there who could be ready and willing to buy your business if you can produce accurate historical and financial information. 

You'll need to get a proper valuation as a first step towards this to know where your company stands and how you can ensure a positive return on your investment come selling time.

A proper preliminary analysis of your business should cost you between $3,000 and $10,000 in most cases. Subsequent comprehensive studies can cost you upwards of $35,000 depending on the size of your business and what type of player you intend to sell your business to (private equity or family office, for example).

By starting with this type of professional analysis, you'll learn how much your company is worth, what sort of sales price you can expect in today's marketplace, what strengths and weaknesses your business currently has, and so much more. 

3. Consider How You're Going to Sell, Transfer, or Liquidate the Business and your Ownership Interest.

What's the end result you're shooting for?

When you can answer this, you can reverse engineer and decide your best course of action to take today to start moving towards that.

For instance, if you are just trying to cut your losses and get a nice check for your troubles, selling out might be best. If this is more of retirement and you'd like to pass the business on to your family, it'll involve facilitating a transfer. 

If your business has a lot of assets, liquidation could be best.

Get the advice that'll steer you in the right direction. Above all, be sure you know what your next "pivot" is. 

Many people seek exit strategies not just to get rid of a business, but to start a new professional and personal lifestyle. It's easier to get through to the other side when you are honest about what you want next. 

4. Get the Help of a Business Lawyer

Finally, you'll always need another set of eyes for the legal end of things. 

This way, you're able to protect the sale or transfer and can weigh every potential downstream implication of negotiating points as they come. Research some business attorneys early in the process so you can get the assistance you require. 

Consider These Exit Strategies

Exit strategies are absolutely necessary when you're making a transition with any business. Use these four tips and you'll be taken care of.

If you're looking to sell your business or explore other options, let these points guide you.