Useful Tips When Selling a Business

Selling is the best exit strategy for most business owners when they decide they are done with a business. Selling a business means that the entrepreneur is able to liquidate at a substantial profit, which is a great sign of strength for any business. There are a variety of reasons why people decide to sell their business. Sometimes, there may be no successors to pick up the reins of the family business. Other times the owner may be reaching retirement age and is ready to bow out gracefully with a reasonable retirement fund in tow. Whatever the reason you decide to sell your business, the tips below may come in handy:

Sell with the right timing and for the right reasons

A most common reason why business owners decide to sell their business is because they are getting older and perhaps are too ill to effectively manage the business anymore. You should realize that this is actually the worst time to sell because the buyer can use these circumstances as leverage on the negotiation table.

So don't wait until you’re forced to sell your business. Try to think of your business as a house, for example. You certainly don’t want to sell your house because its design doesn't suit you, you want to sell because moving will help you be closer to work or school. In the same way your house would probably go on the market months before you move, once you start thinking about retirement place a sell ad for your business. Or, if you know your health is on the decline and it will get too hard for you to keep the business in the future, go ahead and list your business now. Placing your business on the sale list does not mean you have to sell right away, it just means you can start to get interested in bids to compare and consider.

Know what's included in the sale

When selling a business, you need to be clear on what assets are included during the sales process. Determine what tangible and intangible assets you have to sell (trademark, goodwill, client list, etc). You also need to decide whether you will conduct an asset sale or a share sale.

Determine how much your business is worth

Your business is worth as much as buyers in your market are willing to pay for it. However, determining the exact price can be tricky especially since there are various factors involved. For example, it is important to look into the timing of the sale, the business brand, the number of loyal customers, and its future potential.

Several business valuation methods are available; some of the more popular ones include asset-based valuation and the future-earning valuation. But of course, no approach should be used in isolation; rather a combination the relevant factors may provide a merged source of property value that will most closely display your businesses worth.

Have an accurate recording system

Every buyer is concerned about the accuracy of the reports you can provide them with to evaluate your businesses profit potential. It is important for you not to just let things "slide" during your business operation. If this is the case currently, you will need to take extra effort in making sure that your house is in order for the eventual sale. Reviewing old bank statements and purchase orders is a great way to start compiling a solid database sheet of your company’s potential input and output value.

Make sure you Get professional help

Selling a business is an extremely complex process. A professional can help to aid you throughout the process so you can get the best final selling price at the end of the negotiation process. Also you will have established an emotional connection towards the business; a professional can help add an objective point of view to the table so that you sell the business at the price its worth!

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