Even if you're not expecting to exit your business anytime soon, it's never too early to start planning.
Selling your business can be a long and complicated process if you don't know what you're doing. So, before you cross your T's, dot your I's and sign on that dotted line, make sure you check out our list of the basic dos and don'ts.
Do have all your documentation - profit and loss statements, inventory records, etc - ready to provide to serious buyers. Everything starts with the numbers, and if you're slow to provide them then prospective buyers could quickly look elsewhere.
Do try and be as flexible on payment terms as possible. Offering to defer a portion of the consideration may help a deal happen that would otherwise be stymied by unwilling banks. It could even persuade buyers to pay more if linked to the achievement of certain profit targets.
Do sell from a position of strength. If the buyer smells weakness then they'll be liable to seek to drive the price down
Do use a business broker. They're experts. They mediate the sale of businesses every day and practice makes perfect. They can help you arrive at a realistic valuation, they can help you find buyers and they can oversee the whole process so you don't have to. The last thing you want is to be so consumed by the sale process that you neglect the running of the business - perhaps even undermining its value!
Do allow at least six months to sell your business. The timescale will vary depending on the complexity and size of the business and the complexity of the deal, so take these factors into account.
Don't underestimate the value of your business. It's common practice for small-business owners to minimize profits to lower their exposure to tax, so the financial statements may not reflect the true value of your business.
Don't overvalue your business. You might surmise that it's better to start unrealistically high in the hope that someone is foolish enough to pay over the odds. Unless you're in no rush to sell, be realistic because an excessive price will deter many from even approaching you.
Don't use a one-size-fits-all formula to value your business. Your business is unique, different to every other business going.
Don't wait too long to put the business on the market. It's tempting to want to remain in charge while business is good, but it's actually the best time to sell when the business is prospering.
Don't wait until your hand is forced by poor health or a downturn in your sector or the wider economy. Sell from a position of strength. If the buyer smells weakness then they'll be liable to seek to drive the price down.
Ready to sell? You are just 10 minutes away from advertising your business to 1.3 million prospective buyers. Sell your business today.