You can imagine if starting a business was stressful and time-consuming; selling your business is just as grand of an undertaking. However exciting as one feels, it is important not to allow yourself to become overwhelmed.
Emotions aside, it is important to keep yourself organized and have everything in writing from the beginning. This preparation makes your position more attractive to potential buyers and facilitates the sale of your business down the road.
Planning the Sale
It is important to do a few things before you determine how much you want to price your business for. Assess your company’s valuation or work with someone to help you determine this in detail.
It can be confusing to understand the distinction between mergers or acquisitions and picking the right solution for your particular needs.
All of this may seem like a lot to take care of on your own. Look for a brokerage firm to help sell your business while you keep things running.
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Selling Your Business
Much of the preparation and paperwork that goes into selling your business can be cumbersome for most to take on, especially since the general consensus is to sell for the highest price.
There are local resources available online to help guide you through this process from start to finish. For instance, in 2015, the New Jersey SBA (Small Business Administration) saw around 7,000 new businesses startup.
Working with NJ business brokers can provide you with the necessary assistance and guidance on how to best approach selling your business.
Keeping your financial, tax, and contractual documents tied to the business organized and accessible increases your chances of connecting with buyers.
You want paperwork reflecting on the past one to three years of operations to be clear and in the proper format to present yourself in a professional manner.
Brokerage firms prepare a portfolio including this information and more. This comes in handy when determining listing prices and negotiating with potential buyers.
When potential business buyers are shopping the market they will assess risks and industry trends, look at your financials, and compare you with the competition. Business brokers assure buyers of your legitimacy and credibility.
Ask yourself plenty of questions when assessing the value of your company. How stable is my growth? What are the risks associated? How are we doing relative to competitors?
Considering the age and size of a business, you want to sell for one to four times your net profit.
Brokerage firms connect businesses with buyers and protect their clients by working for the business’s best interests.
Companies that do work with a broker can secure higher selling prices than those working independently.
Business Broker Benefits
Brokers provide reports that go into detail on how much a company is worth, the criteria the valuation is based on, and trending industry data. Brokerage firms free you up to run your business while they work to match you with a suitable buyer.
Partnering with a brokerage can be key to understanding how to value a business, as it helps to mitigate the risks associated with selling your business. Reducing involvement in your business’s day-to-day operations at any given point may negatively impact your company’s value.
How to Sell for Max Price
Do not underestimate the ability to run your business while selling it and looking for potential buyers all at the same time.
Keep a folder with all required documents as this level of preparation makes the process smoother for you and potential buyers.
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