Whether you’re looking to retire, you’re burned out or simply want to engage in other endeavors, there are many reasons why you might want to sell your business. Regardless of the reason, there are several guidelines that should be followed to maximize your earnings and prevent complications.
- Generally, the first issue that needs to be addressed is determining exactly how much your business is worth. To come up with a number, you might ask yourself “what assets do I have before I sell my business?” For example, you may own the rights to a patent, have an extensive client list, own a property or own inventory. Before you attempt to sell your business, you should be completely clear on what your assets are and how much they are worth individually and as a whole. In most cases, it’s smart to have a business valuation done by a professional. Doing so should help you come up with an accurate number and can help avoid legal issues from arising.
- You should also be aware of both the pros and cons of your business before making negotiations with potential buyers. While it’s natural that you will want to emphasize the strengths of your business, it’s important to be honest about the weaknesses as well. If you fail to be upfront with a problem area and a potential buyer finds out about it, it could ruin the deal. On the other hand, if you’re honest and disclose the weaknesses, the potential buyer may be able to remedy the situation and he will feel more confident with making a purchase.
- It’s also important to have accurate and in depth records of your sales and tax information. In most cases, you should have three to five years of tax returns and financial statements that have been completed by a professional accountant. If you have employees, you may need copies of their labor contracts. Besides this, if you own a patent or have a trademark, you will need copies of these as well. Prior to putting your business up for sale, you should have all of this information organized and use charts or graphs when applicable so that potential buyers can easily understand the data.
- If you are renting a commercial building like an office or a warehouse, you will also need to ensure that you get your landlord’s approval for switching tenants. In fact, a problematic landlord can bring your plans to a screeching halt if he disapproves of a potential new business owner. You will also need to give a potential buyer a rundown on information like lease length and rent costs.
- In addition, you should be aware of the fact that it often takes a long time to successfully sell a business. While some may sell relatively quickly within a few months, many can take up to a year or longer before you find the right buyer. For this reason, you shouldn’t have any unrealistic expectations and accept the fact that it may take a while to strike a deal. You may be asking yourself “how can I sell my business as quickly as possible?” In order to streamline the process, you may want to enlist the services of a business broker or commercial realtor. These individuals should be able to help you with the often confusing sales process and maximize your earnings.
If you would like to know more about selling your business, please contact Dallas Business Broker, Bill Whitehurst. Contact Us Today.