The idea of selling your small business can be very stressful. Getting a buyer is not enough; you should present your business skillfully too. Proper preparation of your business will interest serious buyers.
Tips for preparing your business for sale
Organize your financial records
Buyers will be interested in knowing that you are earning good profit. Ensure the business has provided you with the profit and loss reports along with balance sheets and tax returns for the past three years. Ensure the records are maintained properly and remain understandable. If everything is not in order with your finances, an accountant could help you organize them. When records are well arranged, others view your business as a good investment.
Streamline your operations
A business that is managed well appeals more to buyers. Try to keep your daily activities efficient and make sure the steps are clearly written down. Offer buyers guides on how to manage the inventory or handle customer questions. Resolve any issues with outdated equipment or suppliers before you start selling your business. If everything goes well in your business, you are ready to transfer ownership.
Highlight your business’s value
Customers are interested in why your business is different from others. Recognize your company’s strengths which can include loyal buyers, a known brand or goods that are exclusive. Highlight how each strength listed will help the company achieve its targets in the future. If you signed many long-term agreements or your website is gaining traffic, make sure to highlight these factors. Clearly defining the value points as you sell a small business lets buyers understand the benefits of your business.
Clean up legal and compliance issues
With legal problems, buyers may not want to purchase the business. Be sure all your licenses, permits and contracts are up to date and still valid. Ensure all lawsuits and tax payments are settled before putting the business on the market. If you’re not confident in the next step, seek advice from a lawyer to manage your problem. Individuals are more confident in dealing with your business.
Reduce owner dependency
When buyers realize that your business relies on you, it might not seem as attractive to them. Facilitate training for employees or managers to do the tasks most important to your business. List what you are responsible for and identify someone who can help if absent. Therefore, the new owner finds it simpler to settle in. A company that does not rely on others tends to sell its products more quickly.
Prepare for buyer questions
Buyers will seek information about your business. You should clearly explain selling, how the business generates its income and the problems it faces. When you are honest and truthful, your partner learns to trust you. Should your sales have decreased last year, be sure to state the reason and outline the actions you took. When you get ready, buyers know you are being sincere and honest.
Plan for the transition
If the handing over process goes well, your business will be more appealing. Provide training to the new owner or offer your support as an advisor for some time. Ensure that your supplier contact details and customer lists are easy to find. Let buyers see that you are still interested in their achievements after they have purchased from you. A good transition plan eases the buyers’ worries and fastens the overall process.
Summary
You need to dedicate your time and energy to prepare your small business for sale since it can lead to a good outcome. After finishing these, you will feel confident about selling and can start the next stage in your life. Begin getting yourself ready now to ensure that the sale goes well.
