Selling your business may be one of the biggest decisions you make. Although the process may seem daunting, there are steps you can take to minimize your stress and maximize your profit and efforts.
Whether you have sold a business before or it is your first time, it is best to educate yourself on the process of selling a small business or corporation before adventuring out.
What are the critical steps?
Determining the value of your business is a large step in the overall selling process. While revenue is important, earnings before interest, cash flow, depreciation, taxes and amortization are critical aspects of the overall valuation. Developing a listing for your business is essential and allows you to let potential buyers see the heart and soul of your company. The negotiations process and finalizing the deal are also critical steps of the selling process, according to business.com.
What are some things to keep in mind?
Before you post your business listing, put yourself in the position of the buyer. What would catch your eye if you were looking at a potential business venture? What would you expect to see from a business that is worth investing your time in? There are some definite key points that you will want to include in your listing, including the following:
- Verifiable financial documents: Be prepared to show bank statements and invoices matching deposits.
- Current statements: Have statements available from the last 12 months
- Past statements: Be able to show the growth history of the business
- Infrastructure, customer concentration and strong management
- Offering Memorandum: Show major accomplishments, future outlook, operations and products and services
One of the most important things is to remain transparent throughout the entire selling process. Trying to hide values or present the business as something it is not will only cause trouble in the end.
Selling your business is a life-changing decision. Ensuring you have everything in place can help make sure you get the most out of your business deal.