Selling one’s business is always a tricky affair. As the owner, you want to maximize the price, while also ensuring that you don’t unintentionally hand over something you didn’t mean to. You’ll also want to find the right buyer, one who will not only treat you right but your customers and employees as well. This can be a tricky business, but it will also ensure that your legacy and bank account are in good order.
The first step is to decide whether or not you should sell your business at all. If you are looking to retire or move on to other opportunities, it may be better just to close up the business and sell off the assets. This is simpler than selling the business as a whole and may be a better option if your business is small, on the decline, or you have no employees or customers you feel the need to support. However, if your business has a lot of ongoing concerns, you will probably be better off selling it as a whole, since impending obligations can mean an increased price.
From there you must make sure to understand what you have. To establish a good price and ensure you get the right amount of money for your business, you need to total up your assets and evaluate your debts. This includes real objects, like inventory, equipment, and property, as well as intangibles such as ongoing contracts, expected receipts and goodwill. If there are any expected or current sources of revenue, you should include them as well. This is also a good time to “shape up” your company by eliminating old obligations or additional concerns. Be sure to transfer ownership of anything you want to keep, such as patents, company cars you also use personally, and anything that has emotional value. It is also a good idea to bring in an auditor to evaluate and appraise your business. A trained third party will not only help you see hidden value and expense but will be able to provide reports and information that you can later use to trumpet the value of your business and confirm that the price is fair.
From there it will be necessary to solicit a buyer. This is best done quietly, both to ensure your employees do not feel the need to jump ship, and also to ensure that clients, customers, and suppliers do not get concerned. Fortunately, there are many ways to search for a buyer quietly. The first is to hire an intermediary, who can take the information provided by your auditor, accountant and other sources and use this information to approach potential buyers. There are also websites where you can list your business yourself, which is particularly useful if your business is small or lacks a physical location, employees, or other aspects of a more regular business. In either case, it is important, to be honest when reaching out to potential buyers and to take your time to find the one that fits you properly.
Once you’ve narrowed the list of candidates, you should take the time to meet with representatives from those looking to buy your company and ask questions. Look into the buyer’s background and ensure that they have enough money to cover the asking price, and that they have a good reputation for being honest. If you’re looking to dispose of your business entirely, you should focus primarily on price, since whether or not your business will continue is irrelevant. If you need or just want your business to continue, it will be important to bring in employees, customers, clients, distributors and other people you have worked with to make sure that their needs will be met. After all, you are not only selling the business’s physical assets but its goodwill and impending income as well.
With all of those assets settled, it’s important to ensure that you get what you were agreed to. Ensure that all parts of the agreement are in writing, and don’t hand over anything until after the contracts have been fully signed and confirmed. Take nothing for granted, and go over the final contract with your lawyer before signing. If you’re getting paid in installments, make sure they come in on a scheduled basis, and if you’re being paid in a lump sum, don’t surrender the keys until the check clears. By being cautious, you can ensure that the sale of your business