Tips to Follow When Selling Your Business
for a New Business Venture
People start their own businesses all the time. For some people, they’ve just never been good at working under people so they decide to work for themselves. Others simply made the decision to take what they’re most passionate about and turn it into a profitable business. Regardless of why people start their businesses, they always either think about selling it or reach a point where they want to sell or have to sell it.
Selling your business doesn’t always mean that your business is in financial ruins either… Sometimes, you’re just ready for your next business venture, and if selling your business is what’s going to help you climb the ladder of success, there’s not too many business owners who aren’t willing to do that.
The thing to understand about selling your business is that there’s a process you have to go through that requires careful planning. The process of selling your business includes everything from cleaning up chaotic tax records and a sloppy arrangement of receipts to updating an old business management system and even remodeling your brick-and-mortar store to help increase the value of your business to interested buyers.
The process of selling your business to start a new one is very similar to all the prep work you have to do to sell your home and move into a new one… All your efforts are done to increase the value of your asset (your business), ultimately.
As mentioned before, there is an entire process you have to undergo to get your business sold, but there are some things you can do on your end to speed up the process so you can get ready to start your new business venture. Just follow these helpful tips.
Tips to Get Your Business Sold
Find Out What Your Business is Worth
Finding out what your business is worth isn’t determined by how much you think it’s worth… you’re going to have a biased opinion, of course, and that’s why you need to speak with a third-party company to take a look at your business.
A third-party company in business valuation services will be able to look at your business with an unbiased eye and give you a realistic estimate of what your business is really worth and base it on the competitive environment your business falls in.
In your valuation report, you can expect to see everything up for review including the following:
- Outstanding debt
- Monthly expenses
Think of this as an annual check-up but for your business… You can only hope for a good report but shouldn’t be surprised if there’s some problem areas to work on. But if your business has been operating for at least a year or more and has shown some profits during the time it’s been in business, it is “saleable” and should spark interest in buyers, especially within your niche.
Make Sure Your Financials Have a Clean Bill of Health
Prospective buyers are taking more time now to investigate the financials of businesses, and understandably so. If they’re going to buy a business, they want to know exactly what they’re getting… Buyers want complete transparency from sellers.
To avoid giving any interested sellers the feeling of dishonesty, hire a qualified accountant to go over your financials with you to get them back in order. They will help you make sure all monies are accounted for, help to ensure no personal financials are mixed with business financials, and look at your business creditworthiness to help you determine if your financials are even up to par to sell.
Even if your business has bad credit, that doesn’t necessarily put you out of the game. As long as you’re upfront and honest about every aspect of your financials, an interested buyer may have the capital to turn all that around once purchased.
Find the Right Business Broker to Represent Your Business
You may be a pretty decent business owner but not a great salesman, and that’s okay. That’s why you need to find the right business broker to get your business sold. A best practice in finding the right business broker for you is to find one in the geographical location of your business. For example, maybe you live in Dallas. If you live in Dallas, you’re going to want to include the term “Dallas” in your “near me” search in Google.
Your search should look similar to this “Dallas business brokers.”
In finding the right broker in your area, you’re also going to want to make sure you find a broker that has experience selling businesses in your industry niche as well.
Only Sell When Sales are High
Buyers don’t want to buy a declining business, so if your business is in a season when sales are typically low, hold off on selling until your sales go up. You may even want to consider changing your marketing efforts, in general, to boost sales at more of a steady pace, instead of the up and down pattern.
Whatever you have to do to get your sales up is the route you want to take. Whether that means having a blowout customer appreciation day, a cyber Monday sale, or investing in an SEO company to gain more online visibility, you need to do it by any means necessary to up the ante on your business’ overall exposure in your market.
Selling your business means that your efforts to appeal to potential buyers need to come from a place of honesty and transparency, especially in your business financials and the true value of your business. Your approach of “striking while the iron is hot,” in reference to only selling when your sales are high, is what’s going to add some appeal to buyers. And finding the right broker is what’s going to tie everything all together to showcase your business to interested buyers in the best light.
If you can implement these tips in your selling process, you’re not only going to sell at a price you and the buyer can agree on but it’s also going to speed up the process so you can get your business sold and start working on your next business venture.