Over the past year, many owners have worked hard to keep their businesses afloat. Now, as things change, some are asking “Should I sell my business?” Here are some steps you can take to get the best price and experience.
Step 1: Get a business valuation
Once you know the value of your business, you will have an opportunity to increase its value before listing it to get a higher selling price. In today’s climate, business valuation experts will assess your revenue and profits in 2021. Meanwhile, ignoring your profits in 2020. That’s why it’s crucial to get your business to where it was before COVID or better.
Step 2: organize your finances
Buyers are focusing on companies that have not only survived the pandemic, but will ensure long-term viability. Before choosing to bid, they’ll want to know everything about your business, from your financials and taxes to your inventory and equipment. Now is the time to deal with any back orders, like tax liens or PPP loan forgiveness, that can prevent any sale from going through. For a smooth transaction, meet with a business advisor to review your finances before you begin the sales process.
Step 3: Prepare your exit strategy
You shouldn’t wait for the next downturn to sell your business – it’s always good to sell when the going is good.
Having a good plan in place will help facilitate a quicker exit. It can also help you get a better return on your investment. Baby boomer business owners will be looking to retire in the years to come, overwhelming the market. Now is the perfect time to maximize your value and make sure your business stands out from the crowd.
There are many exit strategies to consider: selling to friends or family, selling to an internal party, or selling on the open market. Each course of action has its advantages and disadvantages.
Step 4: Find a business broker
The most important thing an owner can do when selling their business is to focus on running their business. A broker uses their expertise and aggressive marketing program to create competition for you, manage leads, and help you get the best price. No matter the size of your business or industry, a business advisor will be an expert. With the right advice and the right advice, you will be able to sell your business seamlessly to the right buyer.
Step 5: Qualify Potential Buyers and Negotiate
One of the main reasons a deal will fail is that buyers fail to get loans after entering into a sales contract. When working with a broker, buyers are qualified for the financial ability to meet the offer.
A business broker can approach and continue to follow potential buyers without weakening your position. The best part is that brokers will control the information released and prequalified buyers are required to sign a confidentiality agreement. This will protect you and your business from someone snooping around your finances without proper supervision.
When selling a business, especially in a hot market, negotiating for the best price and deal is crucial. With the help of a professional, you will be able to avoid any confusion during your sales transaction. They will be able to identify when a buyer is asking too little and will have your best interests at heart.