This is a guest post by Rachel. If you want to guest post on this blog, check out the guidelines here.
Whether retirement is looming or you just want to cash-in and move on, selling your business is a big step that takes effort and planning to execute. A sale can be as financially rewarding as it can be emotionally draining. So, what can you do to maximise your chances of selling your business?
Follow our five top tips below for guidance on how to successfully sell your business.
1) Be Prepared to Answer Questions
The first question a potential buyer is likely to ask is, “why are you selling?”. You need to be clear on your answers and be sure they are right for you. Selling your business may not be the only option available, even if you are looking to retire. Consider whether selling off assets or a share of the business could be a better option before committing yourself. In the meantime, keeping quiet about your plans to sell is usually the best option – unless announcing a possible deal is likely to increase share value. Be prepared to tell employees, customers and suppliers when you are ready, when details are clarified and on your own time.
2) Take Your Time
Rome was not built in a day, nor would it have been sold off in one! Take time and prepare for the sale of your business. It is generally advisable to wait at least a year before selling up, as this gives you time to ‘groom’ your business. The grooming time allows you to get financial records up to date, deal with any outstanding debts or litigation, streamline operations, sort out contracts and ensure equipment is in good shape. Remember, prospective buyers are looking for potential, so choosing a strategical time to sell, when you know profits are likely to soar, could be the most beneficial option all round.
3) Intrinsic Value and Potential
Giving yourself time to sell also allows you to work out the intrinsic value and potential of your business. Allowing for seasonal shifts in profit and economical factors, will help you choose the right time to sell. Also, consider how the business will function without you. Set up strategies that employees can refer to and ensure the core structure will not fall apart if you were to take a long leave of absence!
4) Get an Accountant and Solicitor
At the most basic level you will need your financial records set straight and your legal rights drawn up. Save yourself time and stress by calling on the services of a good solicitor and reliable account. Taxation will need to be considered and sales agreements will need to be drawn up, because these are not things that can be dealt with alone – seek help from the professionals.
5) Use a Business Agent
Minimise your stress by letting someone else manage the sale, someone who knows the ins and outs of selling a business for profit. Utilising the experience of a business agent, such as Christie + Co., can allow you to carry on running your business during the sale process. Business agents can offer advice on how to have your business valued, how to apply for Energy Performance Certificates and when and where, to advertise.
Rachel is a freelance blogger on a variety of business topics, from business advice to buying and selling a business.