Now that 2020 is right around the corner, it’s time to come up with your resolutions. Some people like to change their diets, others choose this opportunity to quit smoking, and many will add “sell my business” to the list this year.
January has always been a particularly busy time for the business sale market. Ambitious buyers often come out of the woodwork hunting for a good deal to invest themselves in.
As an owner looking to sell, you have to be prepared during the most active market time. By planning ahead today, you can sell your business for more than you imagined possible this year. Check out these steps to get started.
1. Prepare Records of Your Financials
In order to sell your business, you need to have accurate financial records from at least the past three years.
Use this time to get together with your bookkeeper and accountant to go over the financials of your business.
You will need to compile:
- A statement of profits and losses
- A balance sheet
- Statements about your cash flow
- Tax returns from the past three years
- Lease documents
- Contracts with suppliers and vendors
- Information about insurance policies
- Copies of all professional licenses and certificates
- Agreements with your employees
Once you have all of this information together, you will notice if there are any discrepancies in your records. If everything is correct, you will be ready to move forward with the sale process.
2. Get a Bussiness Valuation Assessment
It can be hard to get an accurate estimate of what your business is worth. After all, there are a lot of factors that will go into the final sale price of your company.
It will depend on the size of your business and the industry that you are in. But that information alone can only give you a ballpark estimate.
Every business is unique. A valuation assessment from a qualified business broker can help to paint you a better picture of what your company might be worth.
3. Tidy Up and Tie Up Any Loose Ends
In order to attract a buyer, you need to have a solid track record as a business as well as a plan for the future. Make sure you tidy up your business and tie up any loose ends that might make your company look bad to potential buyers.
You should clean out any clutter that is at your office and make repairs to the space if necessary.
You can also take this time to clean up the digital image of your business. Make sure that all of the information that is available online about your business is up to date and looks favorably upon you. Often times your digital impression is the first one a potential buyer will have.
4. Improve Your Business
Before you put your business on the market, you need to improve it as much as possible to ensure you get top dollar for your sale. Look for opportunities to add new streams of revenue to your business model and for ways to improve your workflow and productivity.
You can also look for ways to differentiate your business’ products from your competitors and develop intellectual property to defend your edge.
5. Meet With a Broker
Although it’s possible to sell your business by owner, many people choose to work with a broker. Although you may know your business inside and out, you probably aren’t familiar with the process of selling one.
A broker can help guide you through the process. Contact me today for a free consultation.