4 Tips on How to Sell Your Business
While it’s wonderful to follow one’s passions, most people start businesses to help fulfill personal goals through capital gains or cash flow. The old method was to start a business, generate some cash flow, and close it down upon retirement. Now, entrepreneurs generate several years of cash flow and sell the business when they want to retire, earning capital gains. Below are a few things to do when learning how to sell your business.
One of the most vital things to know about selling a business is that the owner shouldn’t go into the process unprepared. Owners invest a great deal in their companies, and seeing it go to waste because of inadequate preparation can be devastating. Before selling, the owner should learn how the process works and which rules they’ll have to follow.
Build a Good Team
Small business sales are supposed to happen confidentially. While most of those involved will know something is happening, that doesn’t mean that the sale can become a topic of open discussion. Before the sale, the owner should assemble a team who can help keep communications within the company. Prepare documents outlining the company’s finances, assets, liabilities, and workforce, and be sure to reward the team for all their hard work.
Do Some Housekeeping
The next thing to do is to get things in order. Owners should ensure that there are no late payments or defaults and that they’ve fulfilled all their obligations. These loose ends can make it almost impossible to finalize a sale, and they can ruin working relationships as well. Even if the problem is minor, it should be solved before the sale.
Hire a Legal Consultant
A corporate sale usually involves attorneys, and a good lawyer protects his or her client with an ironclad contract. However, not all attorneys are the same; business owners should choose firms who specialize in corporate sales.
Selling a company can be a relatively complicated process, no matter the size of the business. To avoid being in the 80% of companies that don’t sell on the first attempt, the owner should plan ahead and package the company in a way that makes it a compelling buy. When owners follow these tips, they’re more likely to enjoy a smooth, hassle-free sale.
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