Preparing to sell a business can be one if not the most stressful time in the life of an entrepreneur. It doesn’t matter if the reasons are financial, family-related or retirement, there is usually a level of fear of the unknown. Before placing an ad in a ‘for sale by owner” directory or placing an ad you should check and do your homework first.
Does it take a long time to prepare your business for sale?
There are not many similarities between selling a business or a residence. When selling a house you might have to update the inside, plant flowers and paint; however preparing to sell a business can take much more time. Most business brokers say that the correct time to start preparing business to sell is around two years before. The more time you have to prepare the likeier you will get your asking price. It can on average take from six to nine months to sell a business especially when you do not expect there to me many potential buyers you might want to start sooner rather than later. You must remember that there are many steps that you must take before you list your business on the market.
Here is what you need to before you put your business for sale.
- Make sure the books are in order. To make sure that your business is performing well and is as profitable as possible you have to do a detailed assessment of the operations and finances. You could say that you have to get you house in order. This would be the right time to assess cash flow, expenditures, tax strategies and many other elements of the business’ operations to see if they are favorable.
- Time is important. Selling a profitable business is easier. Therefore if you have a seasonal business you should try to sell it right after your busy season starts. If you plan in advance you will not be in a desperate position to make a deal when your business is in a slump.
- Talk to the experts. Don’t be embarrassed to ask for an experts help. You might need help finding a price that is buyer friendly or even information structuring the sale so that is make sense from a tax perspective. You can consult an accountant and it might be a good idea to hire a business broker to deal with the sale details.
- Find out how to show potential buyers that your business has a bright future. A proven track record is a strong motivator for a potential buyer to be very interested in your business. They will also be looking at the future potential of the business. A growth strategy is usually put together by the business brokers. This will be shown to any potential buyers. You can then point out potential opportunities for the buyer so that they can further expand the business. This could take a few days to finish, however a growth strategy can pay off in the end.
It doesn’t matter how prepared you are to sell your business and how much information you can give the potential buyer if they are not a qualified prospect. You can find a good and qualified pool of potential buyers if you list on an online business to business marketplace site. Also take a moment to look at the site and to see how the other businesses are being marketed. If you take these steps you will increase the demand for you business and showing its value.