Selling your business could be one of the most important and
difficult decisions you will make in your business career. When things are
going well – your business is making money, you’re enjoying yourself, and the
future looks great - you’re not thinking
about preparing for your retirement.
The earlier you start planning for your company’s sale, the
better you’ll be able to take advantage of a higher valuation and a quick
turnaround. Here are some good reasons why you should be prepared to sell:
·
You may fall sick unexpectedly

·
Your life goals change along the way
·
Not having a successor to replace you as you retire
·
Business partnership issues and you want to sell
your shares
· Lifestyle change
When you are ready to sell your successful company, you should keep these three things in mind:
·
You must make a profit from your investment in
the company
·
The sale of your equity should be converted into
liquid assets such as cash
·
The amount you receive should meet your needs
for your professional and personal life
What is the value of
your business?
Determining the value of your business is like sales – what
are your potential buyers willing to pay for a business like yours? With the
help of a Chartered Accountant, you can run various accounting models to come
up with a number using data that comes from the economic strength of your
business, your industry, how much your competitors are worth, your sales
revenue and profit margins. All these
must be taken into account. Remember, the buyer is not looking at purchasing
the cheapest business they can find, they are looking for a company that can
potentially make them more money in the future. So you need to prove to the
buyers that your business will continue to grow in the industry you’re in.
Work with a third-party business valuator whose objectivity
can help smooth the sale for both yourself and your buyer.
Are your finances in
shape?
You should already have your books kept in order while
you’re running your business. When it comes to a sale, nothing is more
important to a buyer than your accounting.
They will be asking questions such as:
·
Are you making money?
·
Are your profit margins healthy?
·
Does the company have any unmanageable debt?
New owners want to buy businesses that are healthy and
thriving. You'll also want to be sure
that you've reduced your liabilities as much as possible, doing things such as
settling any lawsuits and making sure all tax payments are up to date.
Gather a professional
team
Selling a business is complicated. With a complex transaction like this, you
want to make sure that all your bases are covered. By hiring a professional team to guide you in
the sales process, they can provide you with the objective advice that you need
to sell your business at the best value. In recruiting a team, make sure that you
choose consultants who have experience in your industry and your type of
business, be it a small business or a large multi-national corporation.
Other than a corporate lawyer who can help you with the
legalese and contracts, you should also take a look at hiring a good
accountant. If your business has assets such as a manufacturing plant and
warehouses, you can also recruit a corporate realtor who may have contacts in
your industry.
Make sure that you take the time and effort to do it right
the first time. By preparing carefully and using the best resources that you
can hire, you are increasing the chances of selling your business at a great
price.
Making a marginal profit on a business that's pretty hard to sell only means that your strategies are quite outdated. Better yet, its maybe time to create new marketing ideas. Maybe a quick push using social media will eventually get you the profits and income that you wanted.
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