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What To Consider Before You Sell


Have you been tossing and turning in your bed, debating whether you should sell your business or not? It can be an agonizing decision to relinquish control of your “baby,” but taking the time to consider all the pros and cons is the best thing you can do.  

 

Questions To Ask Yourself

  • Is your business attractive to buyers? If your company does not have a history of profitability, a loyal customer base, a good location, skilled employees, and competitive advantage, then you may not have much to market.

  • Are you ready?Many business owners let perfectly good deals fall through because they are not emotionally prepared to give up their enterprises. If you can’t imagine life without your work, then it’s best to hold off.

  • Is your business worth something?To you, your business may be everything. Yet, to the market, your business has a very specific dollar amount it’s worth. You have to do a little research to see if you can fetch a good price.

 

Signs It’s Time To Sell

Why stay at the helm of a sinking ship? If your business isn’t fun anymore, then why are you holding on? If you are comfortable with the size and profits, but you’re not prepared to take your business to the next level, then maybe there is someone else out there who is. Or you may find that you don’t have the skills to expand the business to expand or reach global proportions.   

 

Be Prepared For The Big Day

You need to have your ducks in a row before you make it public knowledge that you’re ready to sell. Consider this: one business owner had made repairs to his kitchen, got his financial books up to date, and researched a reasonable asking price for his popular sports bar and grill. A buyer loved everything about the business, but when he asked for data about the point-of-sale system, the owner was unable to provide the information – and lost the buyer to a comparable business in another state.

 

Documents You’ll Need

Before you subject your business to buyer scrutiny, be sure you have the following ready: current and past 3 years of profit-and-loss statements, current and 3 years’ of past balance sheets, 3 years of full tax returns, list of furniture and equipment included, inventory lists, commercial property appraisal or lease agreement, insurance policy information, employment agreements, customer contrasts, patent lists, equipment leases, and bank statements.   

 

Advertise Online

Two of the top marketplaces to advertise your business sale are BizBuySell.com and BizQuest.com. There may also be specialty sites for your particular niche as well. You’ll need to create a one-page document highlighting the benefits of your business, without revealing the name – which is called a “blind profile.” You will also need a more extensive selling prospectus to be sent to serious buyers who have signed a confidentiality agreement.

 

Qualify Buyers   

To avoid wasting your time, be sure you have interested buyers submit their name and contact information, previous business ownership experience, educational background, sources of financing, funds available, minimum monthly income proof, timeframe for completing the transaction, and a statement of their interest. 

 

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Resources:
New York Times: How To Sell Your Business
Houston Chronicle: Fundamental Things To Consider Before Selling A Business


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