BUSINESS

How to Sell a Small Business in 7 Steps

Every business goes through its life cycles.

There’s a day that you have your grand opening and earn your first dollar, which is a milestone for most business owners. Likewise, there typically comes a day that you decide you no longer want to, or are able to run your business.

When this happens, you need to learn the best way to sell your business and turn a profit from it. There are a number of steps you can take that can make this a reality for you.

When you brush up on this area of business, you will be better able to turn a profit and sell your business on your terms.

Here are some steps you should follow when you’d like to learn how to sell a small business.

1. Determine Your Reasons for Selling the Business

First off, you should figure out why exactly you would like to sell your business. This is foundational to the process because it dictates the type of buyer you seek, time table, how you go about seeking the sale, and so many other factors.

The more intentional you are during this phase, the easier it will be to get your desired results when selling your business.

One business owner might be seeking a sale because their business is failing and they see the writing on the wall. Another may no longer want the responsibility of running the business and want to know that they’re passing their company along to good hands and capable ownership.

Regardless of your reason, get clear in your intent, and make sure that you are diligent about the process.

2. Get an Appraisal to Know How Much Your Business is Worth

Before you walk into the sales process, it is crucial that you get an appraisal for your business. This will allow you to know what your business is worth and how much you can potentially get on the open market.

An appraiser will audit every aspect of your business so that you can use it as a bargaining tool during the sales process. Research the appraiser you are bringing in to make certain that their information is up-to-date and reported with experience.

Make sure to also consider qualitative values, such as leadership, personnel, and potential customer base.

3. Hire an Accountant to Clean Up Your Books

It’s also important for you to be diligent about the financial aspect of selling your business. Before you can pitch to prospective buyers, you have to have clean records to show.

Hire a professional certified public accountant (CPA) who can go through your current records, and organize them in a way that lets you produce easy-to-understand reports.

They can also let you know your business’ strengths and liabilities so that you can shore them up and get the business ready for the sales process.

4. Determine Your Asking Price and the Minimum You’ll Accept

Once you have clear information on the value of your business, it’s important that you come up with an asking price. Having an asking price that is well-researched makes you more likely to get a quality offer.

With that said, make sure that you also have a minimum amount that you are willing to accept. This way, if a buyer presents a counter-offer you are less likely to get low-balled.

5. Talk to Some Lawyers That Can Guide You

You’ll need to get the help of a business lawyer that can assist you through the process. Not only will they guide you on the best type of sale you should seek, but they’ll also draw up contracts and oversee negotiations on your behalf.

Your attorney will also help you to conduct research and vet any prospective buyers. They’ll help you out with any mergers and acquisitions, and will be a valuable set of eyes all the way through the closing process.

Start contacting some lawyers that can help you each step of the way. Schedule a consultation so that you can speak to them and let them know your goals for the business sale. They should be able to explain their background and the kinds of business sales they’ve been apart of.

You will need an experienced attorney for this process since it involves so many details and moving parts. Take your time and make sure that you have the right attorney firm in place before moving forward.

6. Market the Business to Prospective Buyers

You’ll need some solid marketing if you’re hoping to get quality buyers. Set up a pitch and presentation, and work with a marketing firm that can help you put it all together.

Develop a list of contacts that you can market to, and take every step possible to keep this marketing confidential. You should have statistics and figures laid out, use high-resolution multimedia, and hire quality writers to create some sales copy for you.

7. Come to Terms and Finalize the Deal

Stay in touch with your team of attorneys and accountants so that you can all work together to finalize the deal. You’ll likely have a series of meetings and negotiation sessions, and there will be many ebbs and flows until the deal is finalized.

Be patient and remember to keep your eyes on your goals so that you can achieve them through this process.

You can make use of these tips for selling a restaurant, law firm, cleaning business, brick and mortar store, or any other small business.

How to Sell a Small Business on Your Terms

These tips are useful when you want to know how to sell a small business on your terms. Contemplate these points and put together a team of professionals that can help you make it happen.

Be sure to come back for more business and finance advice.