Gone are the days when people were content in doing what their ancestors had done for years. First came the desire to work on their own passions, starting something of their own. Next came the courage to leave one business behind to begin a new one.
As a result, for business owners, selling a business turned into a popular exit strategy. For some, there is no heir interested in continuing the business, while in other cases; it had always been the business owner’s plan to do so.
The idea, therefore, is to sell a business at a lucrative price as in the world of finance, having fun is synonymous to making an attractive business deal. Here is all you need to know in order to sell a business at the right price while having fun along the way:
When and Why
Time is of essence, they say and it shows when it comes to selling a business. The most common cause of someone selling a business is their falling ill or becoming too old to take care of it properly. While such reasons are too common, they fail to constitute the right condition for selling a business successfully—successfully being the operative word here.
Not only is it an extra stress to sell your business while you are unwell, it can also be used against you as the buyers will use it as an advantage. When a buyer knows that the other party needs to sell the business, they are bound to make low offers. All you need to do is delete the factor of need here.
Make the choice for selling the business while it is growing and you are still healthy. It is better to make this decision now, when you want to experiment with something else or when you are looking forward to a different lifestyle, such as retirement.
What are you selling
Before you sell a business, you must be aware of all the business assets and determine what is being sold. This means that you should not only be concerned about the physical assets but take into consideration the other factors that accompany a business as well. These include the trademark, good will, and clientele as well. How valuable all of the assets are, depends on their quality.
Moreover, in case of an incorporated business, you can sell it in the following ways:
Asset Sale—everything of the business is being sold except the incorporated company.
Share Sale—everything including the incorporated company is being sold.
What is the Worth of your business
One of the most important things to do when selling a business is to find out its market value. You cannot hope to sell a business at the right price without knowing what the right price really is.
Most of the people try to sell businesses either by what had it cost them to set it up or just by making a guess.
In both the cases, the asking price sometimes turns out to be unrealistic. Why do you think anybody would buy your business if a similar business costs less in the market?
Therefore, you need to know the value of your business before you sell it. There are several business valuation methods to determine the correct value of a business. These work on different principles such as future earnings or asset-based valuations.
However, no single approach can be used in isolation and several other factors should be taken into account as well. These include the following:
The current market trends
Worth of similar businesses in the market
It is, therefore, recommended to make one last investment in your business—consult a professional for your business’s valuation. While you are legally allowed to hire anyone for this purpose, asking a professional will add a lot of worth and credibility to the valuation, increasing its chances of being viewed favourably by the potential buyers. Moreover, it will also save you from various legal hassles in the future.
Keep it going
When you decide to sell a business, you might start losing interest in running it. Whether you are simply tired of doing the work or you think it will no longer benefit you, being careless with the business even in the last moments can be dangerous. It can considerably lower the selling price of the business.
Consider this; you are selling a house that you had been living in for years. You kept it clean for yourself, your family, friends, and guests but when the time came to sell it, you stopped taking care of it. You are going to leave it so why bother with all the work.
When the buyer will come to inspect the house, do you think they will be impressed? Even if there is nothing wrong with the house, the buyer will automatically call for a lower price. Same goes for a business and you need it do well, especially during the selling period.
Keep the records updated, maintain the premises, and keep the inventory in shape. Also reduce the liabilities as much as you can. Sell a business that is thriving instead of a neglected one!
Selling a business successfully is not a simple task but it can surely be made into a fun job. Be clear about why are you selling the business. Determine if the time is right to sell a business. Once you know that, all you need to do is convince the buyer that your business is indeed successful by keeping it so. Finding out the value of your business will allow you to ask for a fair market price, which will obviously increase your chances of getting it as well.
When you have done it all, you will need the right kinds of exposure. This is where a good platform can make things extremely easy for you. Visit the Business Trade Centre to find great customers for your business!