When you decide that it is time to sell your business, the way that you go about the sale will make a big difference to the price that you get. Below are four tips for going about the whole process in the most efficient way possible.
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Get The Timing Right
Lots of entrepreneurs start their businesses with the intention of ultimately selling them on to a larger competitor further down the line. Of course, a business needs to become valuable enough to be attractive to prospective buyers before it is worth selling. However, if an entrepreneur holds on too long in the vain hope that their business will increase in value and clear some other arbitrary threshold, they run the risk of losing it all.
There is nothing wrong with having an ideal set of circumstances in mind, circumstances that would compel you to sell your business. However, it is equally important that you are able to recognise when you have hit your peak, and when future gains are unlikely to manifest. Don’t wait until you are forced to sell your business after the value has plummeted.
Make Sure Your Accounts Are In Order
Before anyone buys your business, they will carry out their due diligence. This means that they will go over your accounts with a fine-tooth comb to make sure that everything is in order. If they uncover minor mistakes, it will not reflect well on your business, and major mistakes can make it look like you are trying to conceal the true picture of your business’s health.
If you sell your business and it then transpires that your account keeping was not accurate, you may have to pay contractual penalties. It isn’t worth risking potential fines by not giving your own books an audit before you offer it for sale.
Get Help If You Need It
The right advice when you are selling your business can help you to maximize the price that you are able to command. There are numerous specialised businesses that exist today to assist in the sale of other businesses. For example, Independent Financial advisers who want to sell their business can use a specialist adviser to guide them through their IFA sale.
If there is any part of the process of selling your business that you are not sure about then it is always worth consulting with a qualified financial advisor. It might seem expensive to engage their services, but once you Factor in the difference in profits you will make, it is clearly a worthwhile deal.
Understand Your Business’s Value
If you want your business to look like an attractive proposition to prospective buyers, you need to understand what it is that makes your business valuable. If your business is in good health and you can see a clear path to increasing its value before you enter into the selling process, it might be worth doing this; just make sure that you conduct a proper cost-benefit analysis.
To maximize your profits from a business sale, you need to approach the whole process the right way. The key to success is getting the timing right and using the right broker to help you make the sale.