Some hurdles to consider when selling a business
According to a recent survey 6 in 10 business owners are looking to sell a business in the next year alone. This is a sharp rise from other years and many are placing the blame on baby boomers that are looking to retire or simply move on to another field of interest. If you are one of these owners, then you have many large hurdles in front of you that need to be cleared before you can walk away with money in your pocket. Having a business to sell is a great way to finance a new career path, retirement, or it can help you tie up loose ends. Regardless, it is your business and you can choose what you do with it and when you do it. Here are some things to remember along the way.
Preparing Your Business for Sale
While your word might be as good as gold, perspective buyers are not going to simply take your word as gold. When it comes time to sell you need to have already prepared the proper paperwork. This includes identifying your accounts are receivable as well as your accounts being payable. You should have a clear list of clientele and what the relationships consist of. You need to clearly identify the employees you have as well as their importance to your business. The proper research must be finished before the business ever hits the open market. Having a business to sell is one thing. Having a business ready to sell is an entirely different ballgame.
What is your business to sell worth? This is a million-dollar question that many have struggled to identify. The best way to determine the value of the company is by adding all of the assets and subtracting the debt. Another option is to look at yearly income and then multiply by 5. One of the best options is to bring in outside counsel for an unbiased and professional approach. Do not sell yourself short but make sure you do not overprice the business.
Who Is the Target?
Who are you going to sell your business to? Finding the right buyer can be very tricky and many times business leaders will seek the help of investment bankers to find potential buyers. When you have a business to sell the last thing you need to be worried about is finding a buyer. Make sure you have exhausted the ranks and you have placed the word with the right people in the right circles. Spend time talking with others in your field. Perhaps a competitor would like to buy you out. Regardless of where they come from it is important that you line up potential suitors before you pull the plug.
Your business has been your life for a long time. You have hundreds of thousands of hours invested and untold amounts of money. Making the right decision about selling can be made a lot easier by simply doing your homework along the way. If you have a business to sell then you need to take the time to properly vet and document all there is to know about the business before it hits the market.
Are you considering selling your business? We can help you. Contact us anytime at http://www.newgatecapitalpartners.com/business-brokerage/