Negosentro.com | 5 Things You Need to Do Before Selling Your Business | Putting many years into building a company from nothing tends to foster feelings of attachment and pride. When the time comes to sell, though, many business owners fail to do everything possible to ensure they will be compensated appropriately.
While selling a business can be complicated and stressful, there are some effective ways to make satisfying results more likely. Do the following five things before selling a company and things will tend to work out for the best.
1. Tie Up Loose Ends
Business is the art of the possible every bit as much as politics, so practicality often trumps ideals. That leaves many companies working with not entirely desirable arrangements, sometimes for months or even years at a time.
Even when such relationships and processes work well enough for everyday business, they will tend to frighten off buyers. If I were to sell my business soon, I would want to smooth over such rough edges first.
That can mean negotiating better terms with suppliers or buying a new piece of equipment to replace one that is always breaking down. A business that looks like it is held together with spit and baling wire will never command the offers it actually deserves.
Fortunately, most business owners will be aware of these kinds of issues since they rarely escape notice for long. Turning arrangements that used to seem good enough into flawless ones will always help when the time comes to sell.
2. Get an Appraisal
Some business owners develop inflated ideas about the worth of the operations they spent so much time building. That can lead to heartbreak and worse, so it will always be better to arrange an informed appraisal.
A valuation for a business should never be taken as the final word, but it will normally make for a strong starting point. Even simply having a disinterested but knowledgeable third party look at a business in this way can be helpful.
3. Keep Your Business Running Well
It generally takes a while to sell a business, and that can lead to problems. Some owners check out mentally as soon as they decide to put a company up for sale.
Potential buyers, though, will want to see a business running smoothly and efficiently, so any deviation or slipping can be costly. Failing to stay on top of everyday operations and the like can reduce the price a business owner will receive significantly.
4. Draft a Detailed Letter of Intent
By the time a motivated, qualified buyer has been found, a comprehensive but preliminary letter of intent should already have been created. This document will normally need to be amended and adjusted a bit, but having it on hand will make everything else a lot easier.
Waiting too long to draft a letter of intent can even scuttle a promising deal. There are quite a few types of preparation that pay off when selling a business, and this is not one to overlook.
5. Plan for the Future
Every business owner should have a solid plan in place before actually selling and moving on. That includes everything from accounting for personal financial needs to thinking about subsequent professional steps.
A little bit of planning goes a long way toward ensuring that the sale of a business will end up being welcome and productive. This is true of the entire process of selling a business regardless of the circumstances. Business owners who keep these five tips in mind can count on coming out ahead.