Selling Your Small Business? Keep this in mind!
Here are the four most important things to remember when you’re selling your business.
1. Make sure you understand the entire procedure
The sale of each business is obviously unique, but there are some features that they all have in common. One of the first things that’s done is to settle on the exact value of the company. Once that’s been determined, you will market it to prospective buyers. You as the seller set out a document that gives an overall general picture of the business and specifies everything that is part of the sale agreement.
When a serious buyer shows an interest, they will check and make sure that everything that’s promised in the sale agreement document is in fact a reality. If the buyer is satisfied after running through all the checks, the buyer and seller will then discuss terms. This will mainly involve the price but will also include other things. Once a purchase agreement has been reached, all the necessary legal work can be done. This includes contracts being drawn up, reviewed and signed.
2. Ensure you have the right help for the sale
It’s vital to work with a good business sales agent who can support and guide you through the process. The agent is paid to work in the best interests of your company when looking for a good buyer. They should also be able to help you with advice and be able to represent you during the process.
You’ll also need a business evaluation expert and an attorney who specializes in business sales. The right business sale agent will be able to help you source these people. You’ll need a tax advisor too who can work out the tax implications of the sale for you.
As you can see, even selling a small company is a big undertaking and you will definitely need expert advice.
3. Show any prospective buyers the business’s value
When selling your company, you will certainly need to have a proper assessment done to determine exactly how much its worth. Any prospective buyers will want this information to reassure them that you are asking the correct price for the business.
Having the company and its assets properly evaluated is a protection both for the purchaser and for you. There shouldn’t be just one price, but rather a range of values that depend on certain market factors or sale specifics. For example, cash flow, the size of the customer base and whether there’s any intellectual property involved can all influence the sale price. If any of the conditions alter or different specifics are negotiated, having a range will help you better determine how the sale price will be affected.
4. Protect prospective purchaser’s confidentiality
Of course, not everyone interested in purchasing your business will end up closing the deal. It’s important that prospective purchasers know that your company will keep their interests and details private.
At the same time, you need to protect the company’s information. A seller’s agent can help you to have a non-disclosure agreement drawn up that you and prospective buyers can sign. Don’t neglect this aspect, but rather make sure to get an experienced business attorney to draw one up for you.
As you can see, selling a small business takes careful planning and lots of hard work. It will be worth it in the end, though, so sell your business safely and smartly by implementing our four top tips.