How to sell your business

Many people overlook the fact that selling your business, is an integral part of your business finances. Selling at the right time can mean the successful completion of business lifecycle, selling at the wrong time can mean that all of your hard work can, in the worst case scenario, be for nothing. Here is what you need to know about how to sell your business-

• Make sure you are selling at the right time-This is crucial, since most of the time a business is getting sold because the business owner falls ill, or gets too old to continue to run it. This is the worst time to be selling a business. Because of this it's going to be extremely difficult for you to deal with the additional stress of selling a business in those circumstances; and the buyer will use your circumstances as leverage against you. The right time to sell a business is when you are healthy and have a successful business to sell.
• Understand exactly what you are selling-Before selling your business, you need to consider what all the assets of a business are, and decide what you are selling. You will need to determine what physical assets you are selling and what other assets you have to sell. It is important to remember that selling a business often includes assets such as:good will, trademarks or client lists, as well as physical assets. The value of these will depend on their quality.
• Realistically determine what your business is actually worth-The reality is that your business is worth as much as it will bring in the marketplace. But determining just what that price can be tricky. There are several different business valuation methods ranging, from asset-based to future earnings approaches. You will also need to consider the current market, economic trends and what other similar businesses, have sold for in your industry. Financial experts advise that no matter when or how you are going to sell your business, you should have a professional business valuation done. Keep in mind that a business valuation that is done by a professional will be regarded more favorably, by potential buyers and may save you legal hassles later on.
• Make sure that your business is ready to sell-If you are preparing to sell your business, you will need to make sure that everything is in order. This is the time that making the extra effort to keep things in tip-top shape can really pay off.Remember that you want your business to show well. It is important to keep in mind that you need to make sure, that you are keeping the business's records up to date, the inventory up and the premises maintained. Potential buyers will want to buy a thriving business, not a neglected one. In addition you will also want to be sure that you've reduced your liabilities as much as possible. You will need to be doing things such as settling any lawsuits and making sure all tax payments are up to date.
• Enlist professional help with you are selling-It is important to understand that selling a business is an even more complex transaction than selling a house. Besides providing necessary expertise to guide you through the selling process, hiring professional help can help you maintain the emotional distance and objectivity you need to successfully sell your business. The professionals you should hire are:
  1. A professional valuator can determine what your business is really worth.
  2. A commercial realtor or business broker is essential in terms of finding and dealing with prospective buyers of your business, and helping you navigate the sales process.
  3. A lawyer can draw up and/or review the documents that are necessary to sell your business.