The time has come at the end: you are ready to sell your business. Planning a small business sale can seem daunting. Maybe you're not sure where to start or how to start a business.
To make the process as simple and efficient as possible, you will want to start planning early. Having time on your side can pay off when you sell a business.
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How to sell your business: critical steps before selling
Selling a business requires a lot of planning. As you begin the process, it is important to focus on the stage you are in and the long-term goal.
If not, you may end up making temporary decisions that conflict with your final plan. Here is a summary of the process and post-sales considerations.
Edit and know your numbers.
The first step is to make sure that your business finances are organized. Clean up QuickBooks, prepare financial statements, speculation, and key metrics for your industry. Understand the numbers.
What is the financial status of the business? Outstanding Debts? Sales-related growth and overall revenue? Several customers with related size? Aligning with your forward guesses?
Also, this is why it is best to start as soon as possible, so that you have time to make adjustments. Maybe you use cash to refinance, pay off debt, or withdraw money from a few shareholders.
Even if you don't need to make any major changes, dirty or incomplete letters can kill the contract before it even starts. You may also need to consider an independent audit of your finances to help give consumers confidence.
Assemble your advisory team
If you are selling a business, having a team of trusted advisors near you is important. Here's why: you've probably never sold a business before and you probably won't. We don't know what to remember… and you only have one letter to get this right.
When planning a sale, get your business team and personal advisors in place early. Your business advisory team may consist of: business / investment banker, valuer, accountant, tax adviser, and M&A employee / agent. The CPA / taxpayer must participate in the whole process.
There are many complexities to consider: contract formation, key staff retention methods, tax planning, post-closing cash flow, etc., so it is important to work with a team of experts who can help you evaluate your options.
How much is your business?
Understand the real world value of your business in the current market by working with a price specialist, business trader, or investment owner. If you are wondering how to sell your business, ask yourself which buyers would agree to pay today?
It may be helpful to discuss the different estimates under different sales structures. For example, if a sale was conducted through a business stock ownership system (ESOP), the company's rating would probably not be higher if the business was sold to competitors.
Similarly, selling an uncontrolled part of a company may be a little more desirable than a full-fledged acquisition.
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