by Jerry Stewart | shared from VisionRadioProductions|
If you caught my last few programs, you know I’ve been talking about this idea of selling your business and getting the most for it. There’s a lot of talk out there that the average American’s most valuable asset is his home, and that may be true for most in America. But, if you are self-employed, you may very well have a business worth far more than your home. And here’s the scary part… Most business owners have no idea what their business is worth. That’s why the majority of small-business owners get less for their sole business then they should.
But, you say, I don’t want to sell myself or my business short. How do I get the most for my business? I’m glad you asked that question, and what I’m about to tell you, you’ve got to hear, so here’s what I call the five steps to successfully selling your business.
First, know what your business is worth before you even offer it for sale. Now that may sound a little too obvious, but in all my years as a financial professional, I’ve only had about 10 clients that have actually come to me with a well thought out business valuation before they considered a sale. In fact, most hadn’t even went through the numbers. That is unbelievable. What you must do is have a professional, perhaps your accountant, do a business valuation. But be careful, make sure you get someone who is well experienced in the valuation process and make sure you know what the fee should be before they start.
Second, once you have your valuation, don’t just hang your for sale sign out on the street. There’s something to be said for discretion. Contact your real estate agent and find out if he has a plan to sell your business. If he has no experience in this area, have him direct you to someone who is.
Third, Once a potential buyer comes your way don’t just open your books or tax returns for his review. Have his accountant talk with yours to get some basic information first. You don’t want to reveal your confidential financial information to just anyone.
Fourth, treat contract negotiation seriously. Don’t just make a deal on a handshake. Get a good solid contract that will protect you from getting into any trouble should the deal go sour.
And, last of all, be prepared to answer a lot of questions. Study your records carefully and be aggressive and firm in your negotiations. Remember, you can be nice, firm and fair all at the same time.
That’s all for now. If you’re considering selling your own business be careful to follow these five steps before you make a bad business deal. Until next time, don’t forget it’s your money!
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Deciding to Sell Your Company