How to Prepare Your Business for Sale

You do not go about every day of your life, selling your business. You do it only once and you need to make sure you get it right after all your business is no less dear to you than your own house, or any other of your valuable assets. You can in no way sell it for an amount which is less than what it is actually worth just due to poor preparation.

To make certain the best sale of your business you must follow the following in order to prepare your business for sale:

2. Planning

It is important that you draft plan for giving effect to the sale of your business before it is out in the market for purchase. By planning you must make certain that the business is best represented before various prospective buyers along with the benefits the buyer is to entail by buying the business and its advantages.

1. Value determination

The most contentious part of the process of selling the business is determining the value of your business. Everyone aspires to set the highest price they can for their business as everyone wants to be rewarded for all those years of hard work and the future years to come as well. However, the buyer aims to purchase a high profit breeding business at the lowest and most feasible price. In such situation, price should be determined after giving due regard to the various factors such as calculating the Return on Investment (ROI), asset value, market value, and other such factors. You can also add to it the tentative cost of building that business from scratch and you may also consult brokers to suggest a reasonable price that may be agreeable by both the parties.

3. Making the sale

The next step is to make the sale by

• Marketing your business

You may have planned to sell your business, determined the price for it, but the most important step still remains, and that is finding the right buyer for your business. Decide whether you want to negotiate with prospective buyers yourself or through the business brokers, either way you need specialised skills to negotiate, advertise, and promote the sale. You need to spread the word far and wide by advertising through various mediums like the social media, newspapers, or by simple the word of mouth, so people become aware of your intentions and you get the best possible deal. You may also explore your immediate networks be it your customers, employees, family, friends or even your competitors. Many a times, a query of sale is likely to be related more to the curiosity of the people than their intention to purchase. Do not be discouraged by such acts as they are normal. Negotiation of price and other issues is also a common and you must be ready for it by realising what it is that you want and what are the matters that you are willing to compromise on.

• Finalising the sale

It is only after finalising the sale with the interested party can the party is referred to as the buyer of your business. It is a very crucial sale and for the same it is always advisable to involve professionals such as lawyers, business brokers, and settlement agents, etc. to give effect to the agreement of sale and not take matters into your own hands. As in case of any problem that may arise thereof, the professionals are the best and the most experienced to take care.

4. Makeover

Once you have planned to sell your business, you can take steps required to make a good and impactful first impression. You can renovate the required areas or construct new ones in order to attract the buyer.

5. Organised layout

Often may be the case that your business is popularly known majorly because you are the running wheel. In this case it is only likely that the business benefits may walk out with you. In such a scenario, it is important that you make it easy for the buyer to step into your shoes. Document the unrecorded policies, procedures, rules and norms that are followed in your office along with designated roles for the various employees in the office so that the buyer can easily operate the business without having to depend upon you.

6. Document business relations

Another thing you must prepare before selling your business is an accessible record containing all the key names of the businesses you are involved with and your relationship with them. All the binding agreements and contracts, whether it be verbal or written must be documented and the buyer made aware of the same.

7. Business financials

You do not want to commit fraud by betraying the buyer or misquote various important figures before him. You need to make sure that all your financial records are updated and explicitly recorded. They should represent the profit and loss margins of your business with complete honesty. Various other financial matters related to collecting all your overdues from your clients, paying your own debts because no one wants to buy a business buried under the burden of loans and debts. You should also previously prepare profit reports and audited financial statement to establish the buyer’s confidence in you and your business.

8. Leases

Before you sell your business, you must review business premises leases and ensure that it is valid and not expired. If it requires being updated or renegotiated then make sure it is done before the sale is made.

Following the above stated steps of preparation to sell your business, you will be able to give effect to a commendable deal where the outcome of the sale will be in your favour leaving hefty sums of profit in your capable hands and rewarding you deservingly for all your hard work and determination. Such preparation will also help you find a buyer who is not only a person with the potential to handle your business, but also one with expertise and skills so required to operate the business.