If you’re planning on unlocking some extra equity by selling your business to retire or to try a new business venture, there are a number of things that you need to understand before selling your business. It’s important to not only sell your business legally but also to make sure that you can get the most out of all of your hard work. You spend years building up a small business that’s profitable and it’s very important that you receive the right compensation for your efforts. Here are some tips that you can use to guide your path in selling your small business.
- Understand your reasons for sale: many different small businesses sit on the market for months or years because the owner simply isn’t motivated to sell. While it is important to consider that you will be receiving some offers that are lower than you might expect, if you are motivated to sell or move on in the business world even if you get the perfect offer you might have difficulty pulling the trigger. Make sure you have a clear stated reason for selling your business and will be willing to get out when the time comes.
- Prepare ahead of time before listing your business: prepare elements for the sale potentially even a year or two before you plan on selling. In order to sell a business you will need to get together a lot of financial records, business structure documents as well as prepare some transitional material that can help the new owner get up and running effectively. Creating these materials ahead of time will help you save time during the sale.
- Decide whether or not to use a broker: many small business owners try to sell their business themselves without the help of a broker. A broker can help with negotiations, advertising and freeing up time through the course of a sale. If you are willing to give up a small percentage of the sale to a broker it’s possible that they can help you sell your business more effectively.