How to prepare for the sale of the business
Are you going to sell your business in the near future? Then for you there are two news: good and bad.
Let’s start with the bad news. If you plan to carry out such a deal in the shortest possible time, it is unlikely that you will receive the full cost of the sale. In fact, it is necessary to thoroughly prepare for selling your own business in order to make such a deal as profitable as possible.
And now the good news. The practice of transferring a business to another owner is quite common, so you most likely will not have much difficulty in finding a buyer, especially if the necessary preparatory work is done.
So, here are some tips to help you prepare the ground for the profitable sale of your business:
1. Relate to selling a business as you would to selling a house
Before you put the house up for sale, many consider it necessary to make at least minor repairs to give the house a presentation. It is logical that selling a business requires some preparation. In particular, you need to put in order all financial documentation and clearly outline key performance indicators for your company.
2. Start taking concrete action.
Since most of the transactions are mediated by brokers, it is advisable to start with finding a qualified broker who can answer your questions and act as an intermediary between you and a potential buyer.
3. Find out which financial models will be used to evaluate your business.
Another advantage of applying to broker services is that it helps you get reliable data on which valuation models will apply specifically to your business.
It is always worth bearing in mind the fact that your main capital is your database, although it is possible that you are in a business where the share capital and production volumes also have a certain value.
4. Prepare the necessary information about your business and a package of promotional materials
The broker will also help you to collect and correctly present all information regarding marketing policy, financial affairs, personnel issues and management features. It is also necessary to conduct an inventory of the property of your company. Of course, buyers will want to get maximum information about your business, and the more information you provide, the less problems will arise during the sale. But it is by no means a matter of disclosing private information about the company.
5. Prepare your team for sales news. To avoid panic among employees, you need to inform them in time about the upcoming sale of the business and the reasons that led you to this step.
So, your primary task is to present your business in the most favorable light in order to attract the right buyer. The main thing is to have patience and remember that not every transaction is flawless. Consultations of an accountant and a lawyer that will help to deal with the payment of sales taxes will not be redundant.
Finally, it is worth noting once again that although the preparation for the sale of a business may seem tedious, it is the quality of its conduct that determines the profitability of a future transaction.