Steps you Need to Take Before you Sell your Business
If you want to sell your business, but you don’t know where to start, or if you feel as though your business might not be worth very much but want to do something about that, then this is the guide for you. Here you will find out what you can do to try to make your business worth more, as well as set yourself up for the future.
Table of Contents
Start Planning your Sale
One of the first things you need to do is start planning your sale as early as you can. If you can do this, then you will be able to envision the steps you need to take to get the right things into place. If you do want to sell, then it may be that you need to plan things up to two years in advance. In most cases, you should plan to sell within the next five years if you start planning now.
Selling your business is not a fast process, and there really are a lot of things you need to do, whether it is updating things like your share structure or even trying to show that you are bringing in a lot of money. As an example, you should be trying to hold onto your company shares for a couple of years beforehand, as this will help you to cut down on the amount of transfer fees you have to pay. If you can do this, then you will see a notable improvement in your business potential, and you may even get more money for it as well.
Know what you Intend to Sell
You should also know what you plan to sell. Depending on the circumstances you have, you may decide to sell up so you can move on with your life, or you may use the money to put into another business venture that you want to start up. You may also want to start a bit of a trading portfolio. Either way, the key is knowing which one of the assets you want to sell.
Do you want to take the property, put it on the market, and keep control of the business? Or would you rather sell part of the business and remain the one who is in control of it? Do you want to take it out as a dividend, or would you rather retain your IP? By considering things like this, you can then know what steps you can take to try and get to where you need to be, and to be comfortable with your business sales overall.
Get a Valuation
You should also try to get a business valuation done. Getting a valuation done is very easy, but it’s something you should try to do before you put your company on the market. You obviously need to know how much your business is worth, but at the same time, you also need to consider the market and if there’s going to be a lot of demand for your particular model.
As a general rule, your business is only ever going to be worth as much as someone is willing to pay for it, but if you get a valuation done, then you can at least figure out what number you are looking at. If you run a dumpster business, you can get a dumpster rental business valuation calculator and then figure out things from there, so you don’t have to undertake a lot of steps to get the ballpark figure you are going for.
Your Options
When it comes to selling your business, you have a few options. The first would be for you to try to sell your business yourself. This is the cheaper option, but you are probably not going to get the best price for it. The second option would be for you to find a broker who can essentially sell your business for you. You need a broker who understands your model and who can work with you to try to get the price you want overall.
If you do go for a broker, then you will soon find that they take a commission from the sale price, and this means you’ll be paying quite a lot for their services. With that said, they are the best way to go if you feel as though there aren’t many people in the area who may want to invest in your business, or if you want to get a quick sale that can be completed as soon as possible.
Calculate your Value
Next, you need to take the time to calculate your value. The price isn’t just about what the buyer wants to pay. It is also about what you want as the seller, and whether or not you are going to be able to hit your goals. One option would be for you to produce a number based on your expenditure and how many years you would like to live off this income.
If you do this, then you can figure out if your business is going to be able to cover this, or if there are any other steps you need to take to make it happen. You can work out things as much as you want, but if you want to get the best result, the best way to go would be for you to hire a financial advisor.
They can then tell you where you should be putting your money to get the biggest return from it, and they can also advise you on things like interest, so if you did put your money into some kind of savings account, you can at least make sure that it is going to grow with time, so you can combat things like inflation.
Things like this can put a spanner in the works when it comes to your business sale, and it can also make it harder for you to live off your income, so make sure that you keep this in mind if you can, as it will make a big difference.
For more tips and tricks, check out these articles:
