Steps To Selling Your Business
If you’re ready to retire or move on from your business, there’s an efficient and streamlined way to sell your business. Review our tips to get you from “on-the-market” to “SOLD”!
Determine The Value Of Your Business
You’ve worked hard to build your business from the ground up and now it is time to put a value on it. Your business broker can help assist you by doing a market analysis and comparing it to similar businesses. From there, you can list your business and start entertaining offers.
Get Organized
Once you list your business, you are going to have interested buyers. Those buyers are going to want information. At first, basic information is fine but a serious buyer is going to do due diligence and ask you about your finances and other aspects related to the business. Make sure you have those details readily available and organized to make it a smooth process.
Some things they will ask for during due diligence may include:
• Organizational documents for the business (e.g. incorporation docs, certificates of good standing, business licenses, etc.)
• Previous three years of business tax returns
• Current year income statements, balance sheets, and cash flow statements
• Revenue broken out by customer for the last three years
• Information on existing business debt
• Customer lists with proprietary information blocked out as necessary
• Existing contracts — can these be assigned to the new owner?
• Commercial lease or other property documents
• Rent rolls if the property has tenants
• Uniform franchise disclosure document (if the business is a franchise)
• Employee and manager information
• Marketing and advertising materials
• Legal records for pending litigation, if any
Get Your Asking Price
Now that you have serious buyers interested in your business, you want to negotiate price and terms. But, before you start negotiating, make sure to prequalify your buyers. You may be met with lower offers, but through negotiation and proper documentation showing your business’ value, you can work to a price on which you both agree. Patience is key during this step as you wait for the right buyer to come to you.
Close The Deal
After you and your buyer have agreed on a price, and the buyer has signed their letter of intent and completed their due diligence, all that’s left to do is finalize the closure by signing the purchase agreement.
Once all documents are signed, you can hand over the keys and start a new journey.
Want to learn more? Reach out to the author, Harold McGee, Senior Advisor, eXp Commercial.
This article was originally published by Harold McGee and We Sell Group on https://wesell.group/seller. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views, opinions, or official policies of eXp Commercial or its affiliates. The content is provided for informational purposes only and should not be construed as legal, financial, or professional advice.