Have you wondered whether it’s time to sell your business?
Thousands of businesses switch ownership every year. In 2018, more than 10,000 business owners sold their companies to other people.
Often, this is the right thing to do. Fresh direction allows the company to evolve in new and exciting ways. The right sale also puts a fair amount of money in the pockets of the former owner.
But knowing how to navigate the business selling process is important. It can mean the difference between securing the right buyer and deal and not getting enough for the sale. Below, we’ll get into our top tips for business sale preparation. Keep reading to learn more and make your company’s transition a success!
Know When It’s the Right Time to Sell
Before you sell your business, you should take a step back and determine whether that’s what you really should do. Once you sell it, you won’t have any input into the direction it’s taking. You also may not get a paycheck from it anymore.
Sometimes, selling the business is the correct move, though. Here are some signs you should sell:
- Your industry is shrinking. If your company is still profitable but your industry is starting to flail, it might be best for you to step aside. Find a buyer who can pivot your company onto a more stable track.
- Your company has outgrown you. Sometimes, your business leaders will want to go in directions that you might not feel comfortable with. If you find your business passing up many profitable opportunities, you should ask yourself whether you’re still the best person to steer the ship.
- You have outgrown the company. Sometimes, you might realize that you no longer want to be at the helm of your company.
Then, you should start preparing for your sale at least a year in advance. This gives you the chance to improve your financial records and client database.
Determine the Worth of Your Business
Next, you want to figure out what your business is worth. This will prevent you from selling your business for less than what it’s worth.
To do this, you’ll need to work with an appraiser. The appraiser will perform a review of your company and tell you how much it’s worth. Their evaluation will give credibility to your asking price.
You should use the appraiser’s valuation as the least amount of money you’ll accept for your business.
Ready to Sell Your Business?
Now that you know how to prepare to sell your business, you’re ready to start presenting it to buyers.
Before you sell, you’re going to have your finances and payroll situation in as good of a condition as possible. Buyers don’t want to have to invest a lot of money in improving these aspects of your business. It might even prevent you from getting a good deal on your company.
That’s where our team comes in. We help business owners improve their bookkeeping, payroll, and accounting.
Want to learn more about how we can help? Contact us today!