Selling a large, medium, or small business can be an extremely complicated process, especially if this is your first time. From preparing the legal documents to producing the financials for prospective buyers, there will be a lot on your plate.
Additionally, you will also have to make many decisions about how to transition out of the business and need to discuss them with your business partners and new owner. Having this guide handy can help you a great deal.
Essential Steps to Selling Your Business
Here’s everything a business owner should know to sell a business and create a foolproof exit strategy.
Determine Your Business’s Value and Set a Price
Begin with determining the value of your business. Figure out the net worth of your business sale by doing a cash-flow analysis and calculating the assets. Considering the financials will help you set the right price to attract more prospective buyers.
If you are unsure how to evaluate your business’s worth seek assistance from a reliable broker with experience in business sales. They are experts in determining the value of large, medium, and small businesses, and can advise on setting the right price.
Gather All Important Documents in One Place
The buyers interested in purchasing your business will surely ask you to produce important documents, including business tax returns, accurate financial statements, patents and copyrights, pending litigation, client lists, etc. to know how the business is doing. Have all the documents ready, and create copies so that you can entertain multiple prospective buyers simultaneously.
The information packet should also provide the interested buyers with a quick summary of your small business administration, employee roster, and any other relevant information.
Target the Right Buyers
When selling something like a bar, a pizzeria, or a restaurant, it’d be great to target buyers interested in buying similar businesses. Investors that are interested in buying gas stations and automotive businesses will be less interested, and targeting them reduces the chances of closing the deal at the price you want.
A business broker can introduce you to the right buyers interested in your customer base and industry.
Have a Business Broker by Your Side
Whether you are selling a small business or a franchise, it’s imperative to seek professional help from brokers. These professionals will help you determine the asking price and do the business valuation properly.
A business broker will educate the buyers about the business assets while providing them information about the annual cash flow and financial health of the business. A broker eliminates the need for third-party valuation, thus, saving extra expenses.
Our trusted brokers in Michigan can assist large, medium, and or small business owners throughout the sales process and help organize the financial records and other documents to attract more potential buyers.
Negotiate the Price, Close the Deal, and Sell Your Business
Once you’ve found the right buyer, it’s time to negotiate the price and close the deal. Again, business brokers will help you with everything required to negotiate and get maximum profits out of the deal.
When Is a Good Time to Sell Your Business?
It is best to sell your business when it is performing well. This means that you have a steady stream of income, sales are booming, dependable customers return, and the demand for your product or service is high.
However, if you’re not sure when the ideal time would be, consult a business broker who has been helping people sell their businesses for many years.
Armen Nazarian Business Brokers is one of the best business brokers that sellers and buyers rely on in Michigan. We are valuation experts that can help you price your business according to the market demand. Moreover, we help you identify buyers and take care of the business transactions, including the transfer of intellectual property and more. The entire process remains confidential as many business owners value their privacy.