Once you’ve decided to sell a business, experts recommend taking specific steps to maximize the return on your investment. Following professional advice simplifies the process and ensures all practical and legal practices are followed. Let’s explore a few things sellers are encouraged to do when selling a business.
Find an Experienced Business Broker
Selling a business without expert advice is always tricky, and it can also be costly. Brokers like CGK Business Sales follow the markets to uncover trends, and they understand the intricacies involved in a business sale. While brokers charge a fee for their services, most sellers find the expense is usually offset by the value a broker provides.
Brokers know how to find the best buyers, assist buyers in obtaining financing, handle negotiations, and ensure the property is marketed effectively. Their knowledge of the area’s market conditions means they recognize opportunities sellers rarely uncover.
Establish the Business’s Value
The next step is to evaluate the business to determine its real market value. Sellers often have a selling price in mind, but that price doesn’t always reflect the market. In other words, sellers are likely to set a price that’s too high or too low. Establishing a realistic value attracts buyers and often results in a quicker sale.
The broker plays a role in establishing a business’s value, but engaging an appraiser is generally recommended to ensure nothing is missed during the valuation process. Appraisers use several approaches to establishing value, which means a seller is more likely to get a solid idea of what their business is worth.
Organize the Company’s Records
Every buyer will expect to see detailed financial records when considering making an offer for the business. Expect to provide a minimum of three years of tax records and accurate financial statements, including income and cash flow records. If buyers discover missing or inaccurate information, they may look elsewhere rather than make an offer. Here, the assistance of an account makes a real difference, as their financial expertise ensures the correct documents are available and that they’re accurate and complete.
Narrow Your Options to Pre-Qualified Buyers
Far too often, prospective buyers may want to purchase a business but don’t have the money to do so. That’s why brokers go through a qualifying process before providing potential buyers with more than basic information about a company that’s for sale.
Finalize the Sale
After a buyer is located and an offer is accepted, finalizing the sale is the last step in the process. Your broker, accountant, and a lawyer may all be involved at this point to ensure the sale closes successfully. Those experts should review all documents to ensure there are no mistakes that could result in the seller facing legal or financial difficulties after the sale is completed.
Selling a Business is a Team Effort
To get the best deal when selling a business, the input of your team members is always important. The broker, accountant, and attorney all play crucial roles when selling a business, and taking their advice will result in a better outcome. Sellers may be capable of selling a business without professional advice, but doing so is strongly discouraged. Leverage the experience of your team members to generate the highest return on investment when selling a business.