If you have been running a small business for a number of years and are considering selling, there are complex considerations involved in the process which you should carefully think about to make the most out of your decision. After all, you have dedicated a number of years to your company and selling is not an easy decision. Here are the considerations that can help you plan the sale successfully.
Why are you selling?
The first question a buyer will ask you is why you are selling your business. Some of the most common reasons include retirement, health problems, change in scenery, and dispute with partners. Regardless of your reason for selling, timing is also very important. You should sell your business when you have a good customer base and consistent income. This will make buying your business more attractive rather than selling it if it is struggling.
Time the sale well
Preparing for the sale of the business should be given at least two years. During the time when you are preparing to sell your business, you should take time to improve sales, and strengthen your customer base. As much as possible, keep complete financial records to help the new owner run the business smoothly after the acquisition.
Consider a broker
Some business owners think that selling on their own saves them money in the long run. However, a broker can help you keep your business running while they worry about all the details involved with the sale. Hilton Smythe – business sales is an example of a business brokerage service specialising in the sale of businesses within the UK. Another benefit of hiring a broker is that you will be connected with potential buyers that are not within your network. You will get more offers, hence, helping to increase the value of the sale.
Best business valuation
The value of your business should neither be too low nor too high. Make sure that you hire an appraiser to get the best value when drawing up an offer for a potential buyer. A detailed document showing the worth of the business also inspires confidence for a potential buyer who wants to make sure that they are buying at the right price.
Have all the documents on hand
Selling will entail a large amount of paperwork. You will need to have all financial statements at the ready especially since this involves tax settlement. You should also have a detailed document listing the assets of the company and how much each is worth. Paperwork should also include invoices and contracts from existing suppliers that will be turned over to the new owner of the business.
Choosing a buyer
In choosing a buyer, you should allow a certain amount of time to ensure that the deal does not fall through. If possible, stay in contact with at least three potential buyers so that you have a contingency plan if your first choice suddenly backs out from the agreement or makes a less attractive offer.