The decision to sell a business can be one of the most significant milestones a small business owner takes. Whether it’s due to personal circumstances, a desire for new opportunities or simply the time to move on, selling a business requires careful planning and preparation.
Depending on the industry and the current economic climate, the process of sell a small business can take anywhere from a few months to a few years. However, there are many steps that can be taken to expedite the process, such as developing a marketing strategy and conducting an accurate, data-backed valuation of the company. Ultimately, the right buyer can be found and the sale can proceed efficiently.
To ensure the best results, it’s recommended that a business owner hire an experienced, professional business broker to manage the sales process. A broker can help the owner develop a strong marketing strategy, determine an appropriate asking price and navigate the often complex and illiquid market. They can also ensure that the due diligence process – one of the longest portions of the sale – goes smoothly. However, a business broker will usually charge for their services, which can limit the amount of profit that is brought home to the owner.
Preparing to sell a small business can start long before any formal discussions begin with potential buyers. Business owners should review the current financial state and project their company’s future performance, ideally with the assistance of an accountant. Then, they should prepare documents that can be presented to interested parties such as a financial memorandum, tax returns and a list of equipment and inventory. This can be a lengthy and time-consuming task, but it’s vital to the success of the sale.
Once potential buyers show interest in the company, it’s crucial to be ready to answer questions and negotiate. This can include addressing any concerns that the buyer may have about the company’s financial health, such as profitability and revenue growth. It’s also important to address any concerns that the buyer might have about the management team and their ability to carry on with the business after the sale.
As the negotiations progress, it’s critical that the owner maintain a positive attitude. A negative disposition can scare off prospective buyers and may prolong the sale, which could result in a lower than expected sales price.
Ultimately, the right buyer can be found for any business and the successful completion of the sale should be celebrated. Once the sales process is complete, a successful transition period can lead to continued growth for both the new and existing employees and customers.
How to Sell a Small Business
A lot of blood, sweat and tears go into starting and running a small business. For most entrepreneurs, there comes a time when it’s time to move on and sell a business that has served its purpose. The decision to sell a small business can be difficult for most, but taking the time to properly plan and execute the process will increase your odds of a successful sale.