4 Things to Consider Before Selling Your Business

The decision to sell your business should never be taken lightly – because once it has gone, you won’t be able to get it back. However, you could potentially change your life once you have sold a company to a buyer. Read the four things to consider before selling your business.

Know Your Company’s Worth

It doesn’t matter how successful your company was in the past, buyers will only be interested in the present value of your business and its potential to grow in the future. The market changes rapidly, which means the value of your company will most likely change at the same speed. You may have been at the top of your game ten years ago, but the company might be less of an attractive option when surrounded by an increasing number of competitors. A buyer will want to invest in a profitable company, and won’t want to spend their time attempting to take the business back to its glory days. Set a realistic offer to attract buyers.

Profit Over Revenue

A business might have fantastic revenue figures, but are the profits almost as good? An experienced business person will only care about the money they will make, so they won’t want to make a purchase if there will be no return on investment.

Be Transparent

Honesty is the best policy when selling your company. If you fail to be upfront about the pros and cons of your business, you could risk a deal falling through once the problems come to light. A buyer will expect at least a few problems, so don’t try to paint a perfect picture, because they will see right through it. You must also be willing to share invoices and bank statements, which will match your revenue and profit claims.

Business Consultancy Services

While you might be tempted to deal with every aspect of your company’s sale, you should consider external help for ballpark valuations, business listings and broker services. For example, instead of thinking “I want to sell my attorney firm” but never getting round to it, you could make the move with the help of LawBiz, who can provide consultancy services on the sale of a firm.

If you do choose to sell your business yourself, you must be prepared for many tough questions from potential buyers, as they will want to know the ins and outs of a company before they sign on the dotted line. However, you could consult a broker, who could handle the questions on your behalf and vet the potential buyers.

Selling your business is a long process, as you must be able to prepare two to three years of tax returns, and ensure you have a profitable business to market. Some company owners choose to sell their business once it is in decline, and will therefore see a smaller return on their investment. You should carefully consider the sale of your company to ensure you time the market right and make the right decision for your needs.

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Eric Write head editor and chief at The Pluto Daily