You may be saying: “My business isn’t for sale so why should I start to prepare my business for sale?“
That’s a great question, you see the best time to sell your business is when you want to, not when you have to.
Did you know, based on a study by The Business Spectator and verified in our own national survey in January 2015 less than 10 percent of businesses are ready for sale?
There are a number of circumstances often beyond your control as a business owner that may force you to have to sell your business quickly. For example: ill-health, death, divorce, the need to suddenly relocate, conflict, loss of key staff, exhaustion and more. When this happens you may only receive a very low price or worse you are forced to simply close the doors and walk away with very little or no money.
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As business owners we all know logically that at some stage we are either going to have sell our business or close it down. Selling your business is almost always a better option. When a potential buyer is considering buying your business they are going to spend a lot of time reviewing the history of your business.
The potential buyer for your business is going to ask to see a copy of your financials, often going back three or more years. Up to date clean financials with fewer adjustments will always give a buyer better peace of mind. The good old “nudge, nudge, wink, wink, you know what I mean” line does not work well when trying to sell your business. Every dollar that you take out of your business and cannot account for, can have an impact on the value of your business.
Another area to consider is that the buyer is going to want to know that the business, not you, have good agreements in place with suppliers, customers and staff. The best way to do this is to methodically put these in place in the usual course of business. When you decide to sell you may not want your suppliers, customers and staff to know until the time is right. If all of a sudden you are rushing around trying to get agreements in place, this can make people curious and create unnecessary complications.
Set some time aside today and answer these questions:
- When do you want to sell your business?
- What will you do after you sell your business?
- How much money will you need to sell your business for?
To best prepare your business for sale can take a long time. By starting to prepare your business for sale today will give you more options and put you in a better position than just having to close it down or accept a very low offer.
The good news is everything you are doing to prepare your business for sale will help make your business more successful. What is good for you is also good for the buyer.