Selling your business is probably not a decision you came to easily. After all, you have likely put a lot of time, effort and resource into building the business into what it is. However, the time usually comes when you have taken the business as far as it will go, or you are simply ready to move on to a new venture or even retirement.
Selling your business may have always been in your plan; something that a lot of business experts advise you to do. This is because you will already have an exit strategy in place, which can make it much easier when it comes to selling as it is not an impulse decision.
However, whether you’ve thought about it before or not, selling your business can be a tricky process. You must manage to sell for the right price and get the most out of the deal. With that in mind, we offer some tips on how to achieve this. We will help you understand the following:
- Selling at the right time
- Carrying out the right preparation
- Finding the right buyer
Selling Your Business at the Right Time
Getting the timing right when selling your business can make a huge difference, and may even make the process faster and easier than you first anticipated. Of course, the timing of your sale not always be in your control, such as selling for purposes such as ill-health or a family emergency.
However, finding the right time to sell your business could be an important factor. This is because there is such a thing as a bad time to sell. If your business is currently experiencing falling profits or going through a dry patch, you should consider hanging on.
This is because buyers will try to get a lower price, or you may not be able to sell the business at all.
Ideally, you want to sell your business at a time when it is performing well. The better your business is doing, the more attractive it will look for prospective buyers. This extends to the wider market too; if you’re in the middle of an economic downturn, it may not be the best time to sell.
Carrying Out the Right Preparation
Getting ready to sell your business can take some time. It’s important that you follow all the necessary and legal responsibilities when selling. The business must comply with employment law, and you need to tell HMRC when you sell your business.
However, before you reach that point, you should get a valuation of your business to determine a sensible sale price. There are several ways you can value your business, including asset valuation, earnings ratio and entry cost valuation. With Bizdaq, you can get an instant valuation using our calculator.
Preparation to sell your business also includes making sure that all records and information is in order. Prospective buyers will likely ask to see documentation including financial records. Having these on hand and in an organised manner can really help with the sale process.
Finding the Right Buyer
Many business owners will jump at the first offer from a buyer. You mustn’t just sell to the first buyer who shows interest; you need to find the right buyer to take over your business.
While you are selling the business and essentially moving on, you will still want to make sure that the business goes to a good home. You may want to do some research and make sure the interests of your business and the interests of the buyer are aligned suitably.
Buyers will usually buy a business for financial or strategic reasons; either they want a revenue stream or the business fits in with their long-term goals. Understand the buyers’ backgrounds and plans they have for the business, as it can help you visualise where your former business will be in the future. After all, you don’t want to sell to someone and find out a few years later the business failed!
For further advice on selling your business, get in touch with us today.