Five Simple Steps to Sell Your Business
True entrepreneurs build cash flow systems, not jobs for themselves. And business owners own life-long dreams, not businesses. When the time comes to start your next adventure, care should be taken to get the best price for what you have built. The following tips can help business owners successfully sell their businesses.
1. Start with the End in Mind: This process should begin the day you purchase or start your business. To build long-term value, develop procedures and maintain a tracking system of customer transactions, financial records, licenses, equipment, and inventory. Your new owner wants your business as turn-key as possible.
2. Determine the Fair Market Value of your Business: Because the market determines value, business intermediaries are the most qualified professionals to value your business. They have the most complete and current information on actual business sales and pricing formulas, and can, therefore, provide businesses with accurate market values. For best results when choosing an intermediary, seek a Certified Business Intermediary.
3. Continue to Manage your Business as if You’re Not Selling it: A common mistake made by sellers is to relax once they have decided to sell their business. To maintain maximum value, continue to manage your business with complete dedication and keeping up your inventory, maintenance, advertising, and customer service levels. Taking your foot off the pedal now can only cause you to lose velocity and subsequent value in your business. This is one more reason to trust a professional intermediary to help you through the complex process of your sale.
4. Maintain Confidentiality: Your business value could suffer if employees, customers, or suppliers know your business is for sale. Executing a representation agreement for your business with a qualified business intermediary assures you of confidentiality as well as step-by-step assistance through the selling process.
5. Negotiate Effectively: Negotiation involves flexibility, and the lack of flexibility can prematurely end a deal with a qualified buyer. At this stage, you benefit tremendously from the professional help of a VR business intermediary who is trained to develop creative (and responsible) terms that help close the deal and ensure that all interests are met.