General Information Regarding Selling Your Business
In today's marketplace, the sale and purchase of businesses
occurs quite often at all different levels including anywhere
from small, privately owned companies to large corporate
conglomerates. Regardless of the type of business one owns,
there are a few tips one should follow when selling their
business. The following paragraphs will highlight some of these
handy guidelines.
Make the Necessary Preparations Prior to the day in which the
business changes hands, it is important that the soon to be
ex-business owners take the necessary steps in order to ensure
that the transaction goes smoothly. This should be done before
the individual business owner even finds a buyer for the
business as a company that can stand on its own, independent
from the current owner, has an extremely attractive quality to
it. Therefore, it is important to make the business as
self-sufficient as possible prior to the sale.
The Asking Price Should Be Reasonable
Although most individuals would like to get as much money as
possible for their business sale, it is crucial that the current
owner of the business present an asking price that is a
reasonable one. Not only will a reasonable price attract a good
number of potential buyers but it shows the mindset of the
current owner as well. Dealing with a fair individual is
something that most people would like to do when it comes to
business purchases.
Present Current and Clear Financial Documents At some period
during the sale discussions, the potential buyer will want to
know quite a bit about the financial background of the company
itself. Questions regarding annual revenue, expenses and so on
will be asked and for this reason it is important that the
current owner of the business has the answers to those
questions. The best way in which to have the answers prepared is
to use a spreadsheet method which clearly and concisely lays out
all of the pertinent information so that the potential buyer can
understand the background of the business.
Remove Items That Are Out of Date and Not In Use Another tip for
current business owners to keep in mind when they are trying to
sell their business is to remove any equipment from the office
which is archaic or not in use. By clearing these items out of
the office area, it makes the office look much more presentable
to potential buyers who may stop by to see what type of business
is being run by the current owner.
Maintain Usual Business Standards and Then Some From time to
time, when business owners know that they are going to be
selling their business in the near future, they may tend to
relax a bit and not keep up with sales as they used to. This can
be detrimental to the current owner, especially if they have not
obtained a purchaser at that point in time. Keeping the business
in good running order, if not better, is the best way to help
aid in the sale of one's business. A prospective buyer usually
wants to purchase a business that yields good returns and has a
good reputation with the general business market. Therefore,
maintaining one's business standards to the best of their
ability is extremely beneficial to the current owner of the
business.
Keep the Potential Sale Confidential Keep in mind that a sale is
not final until all of the necessary paperwork has been signed.
Therefore, it is crucial that while the sale negotiations are
taking place the current business owner does not leak the news
that a potential sale may be in the works. Doing so may not only
hinder the current deal but scare employees, customers and other
business associates. Confidentiality is something which the
business owner should maintain at all costs.
Review All Aspects of the Deal Although the price of the sale
transaction is what really peaks the interest of those
participating in the sale, it is extremely important to review
and know about all of the specific details regarding the deal.
As the price is only a small portion of many business sales
transactions, it is pertinent for the business owner to review
the sales agreement to know what the end result will be.
Seek Professional Advice Lastly, business owners who are looking
to sell their business should do all that they can to obtain
professional advice regarding the business transaction.
Accountants, lawyers and business brokers are some of the
various parties which business owners should consult before,
during and after the sales transaction to ensure that they are
covered every step of the way.
Business owners who take heed of the previously mentioned tips
may find that the sale of their business will flow that much
more smoothly throughout the entire length of the transaction.