Are you thinking of selling your business?
As an entrepreneur and professional salesman, I’ve built and sold my own businesses, as well as worked for companies that were later acquired.
To get the best price and make the best deal when selling your business, it’s important to get your business in order before you try to sell it. If you’re just launching a business, now is the time to strategize your exit plan. For a Sales Assassin, there is no sale more critical than selling your own business.
What is an exit plan?
Your exit plan helps you successfully transition out of your business… on YOUR terms. Exiting your business could be selling it to another company, or an internal sale to key employees, liquidating or transferring your business to family members. According to wealth managers Johnson Lyman, creating an exit plan will help you to create an orderly, financially sound, and tax efficient plan that allows you to:
- Get Maximum Value – for your business at transition time.
- Reduce Risk – inherent in any internal transfer or third-party sale.
- Stay in Control – of the entire process until you are ready to move.
Selling your business may take between six months and two years according to SCORE, a counseling service for small business owners.
10 Steps to Take TODAY to Prepare Your Small Business for Sale
1. Start a list of potential buyers
For many small business owners, their business is their baby and they care deeply about who they sell their business to. According to entrepreneur Marvin Russell, it’s critical to find a strategic buyer for your business: you don’t want to sell your business to just any buyer, you want to sell your business to the best buyer. That buyer might be a competitor, an employee or someone from another industry entirely. Keeping a running list of potential buyers will help you sell your business quickly and profitably when you are ready to sell.
2. Audit your own records
Make sure your accounts and paperwork are in order long before you decide to sell. Invest in a good tax attorney or accountant to audit your books and make sure your paperwork – financial documents, tax returns, patents – is in order.
3. Assess your team’s skills
If you’re no longer running your business, does your current team have the necessary skills to manage and keep the business profitable? Does your current team need additional training? Do you need to make some strategic hires?
4. Solidify your management team
When acquiring a running business, most buyers want assurance that the business can continue to operate and generate profits once the owner exits. Make sure your key employees are committed to staying on the team after you depart and supporting the transition to the new owner.
5. Get an independent valuation
Hire a business appraiser to assess the present value of your business long before you’re ready to sell. Then, determine what steps you need to take to increase the value of your business before you sell it.
6. Identify what assets you don’t want to sell
Is your car part of your business? Do you work out of your home? Do you have intellectual property? List all your assets, and determine those that are for sale, and transfer those that are not to your personal property well before you’re ready to sell.
7. Consult other entrepreneurs who have sold their business
Ask advice from other small business owners who have sold their business for things they wish they had known before they signed the agreement.
8. Review contracts, licenses and agreements
How long are key income sources guaranteed? Do you have contracts with vendors that are due for renegotiation? Are leases set to expire? Are loans due?
9. Assess the value of your services during the transition period
Can your business run without you? After you sell your business are you willing to stay on as a consultant? For how long? On salary, or as part of the sales price? Understand your value to a successful transition of your business to a new owner, and how you can replace yourself.
10. Know your after-sale plans
Whether you’re selling your business to launch a new venture, to retire or for another opportunity, you need a plan for what you’re going to do when you sell your business. The last thing you want to do is just ‘drop in’ on your old business because you don’t have anything to occupy your time.
Is your business #FitToSell?
Free Download: Save a copy of this checklist I made:
10 Must-Dos to Prepare Your Small Business for Sale
This article originally appeared on LinkedIn
About Anthony Caliendo
Anthony has discussed his sales strategies on radio and TV on CBS, NBC, ABC and FOX. He has been quoted in industry mags including Salesforce, Small Biz Daily, The Canadian Business Journal, Focus Magazine, TK Business Magazine, AMA Playbook, In Business Magazine, with a spellbinding book review in Digital Journal.
Anthony lives and works in South Florida with his wife, Lynette and their eight children.
To connect with Anthony or for more information on motivational speaking, coaching services or media opportunities please visit:
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