Sometimes there comes a moment where you decide it’s time to sell your business. But regardless if you’re forced to do it or that was your intention from the start, you should make preparations that will allow you to sell it for the highest price. According to the Dental Practice Guide, finding the best price for your business is not too hard, just takes a bit of effort and you can be well on your way to retired life.
Selling a business is a very common thing, and you’d be surprised to hear the numbers.
Nearly one in five businesses are sold or merged into another. A clear example would be Snapchat or Instagram. But do know that it takes time for a business to be sold. To be more precise, it takes years to do it depending on the size.
But how would you do it’? If you have no idea and are interested, we bring to you 9 ways on how to do it.
1. First, Evaluate Your Business
Getting a business evaluation from a third party player is probably the smartest step to take. The reasons for why you should evaluate first are many, and each one is equally important for your next move.
For example, an evaluation gives you an idea of what you’re worth. This is beneficial for you because you can easily fend off potential low ballers.
Secondly, an evaluation tells you exactly what your strengths and weaknesses are in terms of business practice. Make sure to remember this one as you can make adjustments during the selling process that will greatly increase your businesses’ value.
Other reasons for evaluation include your financial situation, your position and strength on the market, and more.
2. Sort Out Your Books
It goes without saying that no one will buy a business that is in a mess of a financial situation.
Before you even list your business for sale, you should hire someone (if you don’t already have a person for it) that will take care of the books.
The longer your company has been operating and the longer your finances have been neglected, the longer it will take to take care of it.
3. Understand The Potential
When it comes to selling a company, a lot of the calculation and decision making from the buyer is done based on potential.
The person selling has maybe zero knowledge of its potential, and the owner is simply looking to make a profit.
However, you should always know your company’s potential, and that can be your bargaining chip.
If your plan was to sell your business, then chances are you already have this one ticked off. No one would sell their company without previously doing the math.
4. Always Consult With a Financial Advisor
When looking to strike a deal with the buyer, you will have to pay taxes for it.
When the moment comes (and it’s quite early for that now) you should consult with your financial advisor reading your corporate and personal tax. You will also have to take a look at your personal tax situation, as errors might occur during the selling process.
5. Go Through Proper Channels
If you want to sell your company, you can’t just head to the nearest café and should your lungs off; you need to do it the proper way.
By this, we mean going through official channels that specialize in such transactions.
There are many platforms out there that provide you the option of listing your company for sale. One such platform is Business Sales Pty Ltd, a listing company that allows you to easily find a buyer/seller for such transactions.
6. Make Good On Your First Impression
So, you’ve listed and now someone has made the first move. When this is the case, a face-to-face meet up is required between the two parties.
Chances are, you won’t meet on neutral grounds and the buyer will come to your establishment.
Regardless of what your business is, it needs to welcome the buyer. First impressions are very important when conducting such transactions, and giving the buyer a bad first impression can make him run like hell.
7. Tell the Buyer Why You’re Selling
Formalities will be exchanged and a very common question will be asked.
“Why are you selling?”
This is a question that MUST be answered the right way; no point of lying about it. Truthfully speaking, most companies are sold because business is limited, or they don’t make a profit.
But will you tell the buyer this? You need to articulate your reasons why. The buyer will have one thing on his mind, “If it’s good, why are you leaving?” You need to give the buyer a satisfying answer that won’t be a cause for concern.
8. Hire an Advisory Team
On the off chance that things go smoothly, a very important step to take is the following one.
When talks are conducted and hands have shaken, it’s now time for the two parties to do the legal side. Chances are you have little to zero knowledge about this part, so you can help yourself out by hiring an advisory team full of attorneys and accountants.
The process of merging is different than that of selling. If you happen to be merging, then there are other legal things to look for.
For the selling process, additional personnel will be needed to finalize the transactions. As a general rule of thumb, always look to hire an investment banker or a business broker that will walk you through, represent you, and provide any additional assistance throughout the process.
9. Don’t Lose Sight
As we mentioned earlier, it takes a lot of time for a company to be sold. When the selling process has begun, the biggest mistake you can do is take your foot off the gas pedal.
Even if you’re currently in the final stages of the transaction, your business still needs to operate. Your company still needs to make profits so that the potential buyer doesn’t walk out.
Until the final moment, until the transaction is complete both financially and legally, your company is still in your possession and you need to act accordingly.
