The decision to sell your business is a huge one to make. You wouldn’t want to incur a loss from this, nor would you want to feel bad about not owning the business anymore. Thus, before you proceed with the sale or even think about putting your business on the market, here are 7 important things that you should take into consideration.
#1 The reasons behind selling
Whether it’s for profit, or you just can’t seem to make it work anymore, there has got to be a reason as to why you’re selling your business. You might even want to sell it because it’s not making as much money as it once used to, or because it’s just part of a dying industry. These reasons help motivate you into selling your business. And as long as you have a reason or a purpose to sell, you can overcome all the other obstacles that lie ahead.
#2 What do your partners have to say
It’s highly likely that the business you’re in has more owners apart from you. In such cases, the decision to sell the business is not yours alone to make. Hence, you’ll have to sit down with your business partners and work things out. Communicate the reasons behind selling the business, and why you think it’s a good idea to do so. If it’s them who are eager to sell, you should listen to their proposal, see what you’re going to get from it, and then pass your decision.
If you guys do agree to sell, make sure to work out all the math and how the money from your sale is going to be divided among you.
#3 Is it the right time to sell
There’s always a right time to sell a business. This timing depends on certain factors including market value, failure to cope with increasing stress related to the business, not having the motivation to continue, and so on. Usually, people sell their businesses when they realize that they can profit from the sale. In most cases, these people are mentally ready to sell their business the moment it hits a certain value.
#4 Getting a business valuation
Assuming that you’ve decided to sell, you now need to set a price range below which you’ll not be willing to sell the business. To set this price range, you need to run a full business valuation of your company. You can do so with the help of business brokers. If you want, you can also use an online business valuation calculator to do this for you.
The valuation should take everything related to your business into account, including all the assets and resources. After conducting a full valuation, you can go ahead and set a price tag on your business.
#5 Can you answer your buyer’s questions
Potential buyers will have a ton of questions related to the business. You don’t necessarily have to answer them all, but they will expect you to do so. Apart from the things that are confidential and you can’t disclose, you should be able to answer most of the questions they have. Make sure to give them facts and don’t hide anything.
#6 Planning the sale
Planning the sale is perhaps the most daunting part of selling your business. It requires a lot of patience and commitment to do so. From pre-qualifying buyers to dealing with all the paperwork, there are a lot of things that you need to plan for. If you feel like you’re not the right person for this, or you just don’t want to bear this burden, you can get a business broker to do all this for you. They’ll charge a small fee for their services, but it’s worth it.
#7 Are you emotionally ready to sell
Even if you’re making a profit by selling your business and have plans to start a new one, you need to sit back and think whether or not you’re really willing to sell. This part of the decision-making process is completely emotional. It doesn’t require any logical reasoning but is just as important as any of the other factors.
If you’ve formed an attachment to the business and want to keep things the way they are, you don’t have to sell it, even if you’re going to make a lot of profit from it. Just make sure you have no regrets once you’ve decided not to sell.