If you’re looking to sell your business you have a number of considerations to take into account as to how to go about doing it and when if you are seeking the best possible sale price. The problem that too many small business owners face is that they are altogether poorly prepared or unprepared in general prior to putting the enterprise up for bid.
This almost always results in those business owners receiving less than they could have earned had they just taken the right precautions and made the smart decisions ahead of time. Don’t be one of those businesses for sale Tempe that loses value when it hits the market.
Avoid the pitfalls that are lying in wait by checking out the following tips for getting the best price when selling your company.
Choosing When to Sell
The best time to sell your business is when things are going well. The company is turning a profit and has a bright future. We’re not even talking about economic climate here, the sale of a business must be done at a time when the business owner is fully engaged in the operation of that endeavor yet wishes to sell nonetheless.
Unfortunately, many business owners put their companies up for sale at a time when all of the advantage is given to the buyer. A business owner who decides it’s time to sell because they want to get out quickly will always cede their leverage in the transaction to potential suitors who will often submit an offer that is far below the best price since they hold the cards.
Deciding Why to Sell
Sales is all about making the best possible presentation of the thing you are trying to sell. The same thing goes for selling your business. Think about selling your automobile, you don’t tell prospective buyers you’re selling it because you don’t like the color or the engine doesn’t have enough horsepower, you come up with a much more attractive reason.
When you put your business up for sale, you will inevitably be asked why you’re selling and why now? You don’t respond by telling them you’re tired or you feel like you’ve grown too old to manage the operation any longer, that’s only going to signal the buyer that you may be willing to take any price just so you can get on with the next phase of your life.
Instead, you tell them you’re considering a retirement or you have other business opportunities in mind that might be more exciting or lucrative to you. Always remain upbeat and positive and make the buyer think you have all the time in the world to sell this thriving, successful company.
Know What You Plan to Sell
When you decide to sell a business there is a wide-ranging list of factors you must consider as to what exactly is and is not included in the sale. Making this determination could sometimes be the difference between reaching a deal or failing to do same.
That’s because all businesses are not the same. You need to consider things like physical assets along with other assets that are less tangible but just as critical to the well-being of the business. Another thing to take into account is whether the sale of the company is a sale of the assets only or a full share sale which sells all aspects of the business without exception.
Analyze Your Company’s Value
Anything you plan to sell is going to come under close scrutiny by potential buyers and when it comes to putting your business on the market, you’ll have a wide range of questions to answer. Among this criteria will be queries as to your sales, revenue, the company’s growth, company profits and estimated trends.
How robust is the competition in your field? Are there major risks involved in operating this type of enterprise and what does your business require to run smoothly? All of these standards are going to be closely viewed by prospective buyers and the more immediate you can be about answering these questions concisely and accurately, the more likely you will sell your business for the highest possible price.
It’s imperative that you know the real value of your business so you can make it more appealing to attract multiple buyers and get a bidding war started to increase the sale price.
Prepare Your Books
The questions above will need to be answered in earnest but you’ll also have to support your claims. That will require you to have your financial records in order for review. Get started now and you will be better prepared to provide all of the necessary documentation when a buyer asks to see it.
This is also a good time to clean up your financial picture with respect to any outstanding loans, debts, taxes, and your credit score.