Determining How to Sell a Business
Financial experts agree that understanding how to sell a business isn’t easy and requires a specific strategy. This strategy need not be complex but does need to be thoroughly thought out. The one question that must be answered completely is what is the desired outcome? Answering this question will require time and could take a few years before the actual sale of the business.
What is the Desired Outcome of Selling the Business?
The answer to this question may have many components and will be different for each business owner. However, being able to flesh out the answer thoroughly will ensure the desired outcome. For example, are you selling to retire? And, if so, would leaving the business to children be a better option if you want to have continued access to the business? Will you need the money from the sale to maintain your current lifestyle? Perhaps you don’t really want to sell the business but need capital to keep it afloat, and having a partner may be the answer. These are just a few possibilities and depending on the necessary outcome will generate a different answer.
How Much is the Business Worth?
Having the seller’s value of the business and the buyer’s value of the business align is the goal. However, in most business sales, this isn’t the case. Being able to substantiate the price of your business requires that you have a firm grasp of how the business is doing financially. This is easier done in advance when tracked over the years.
Some may deem it unnecessary, but seeking the advice of a business broker who has experience in these matters is worth the investment. An advisor can guide you in matters that are most important when bringing the business to a level to get maximum profit. Once again, this is a relationship that is best built at least a year, preferably several years, before you intend to sell the business.
Answering these important questions may seem simple enough. However, giving yourself time to dig deep and to prepare will place you at an advantage. In addition, you will limit the possibility of seller’s remorse, which is common when selling a business without a carefully considered exit strategy.