How challenging is selling your small business? On the surface, the prospect appears simple. First, you have a business and want to sell it, then you share that information and wait for a buyer. But the reality is both more complicated and more nuanced. Using an knowledgeable business broker takes the pressure off you so you can focus on your business operations.
Few business owners understand all the steps involved in selling a business. Even fewer have the time in their busy schedules to manage the process. That's why working with a professional business advisor - like an expert from Transworld Business Advisors - can help you sell your business with ease and confidence.
Prepare All Necessary Documents
To begin the process of selling your business, you will need to gather all the appropriate documents for your advisor. Items to include are:
- Tax returns for the past 3 yers
- All leases and contracts
- YTD financials
- Vendor and supplier information
- Current inventory
- Accounts receivable aging
This information provides insight on your business, allowing the advisor to determine a fair listing price as well as create effective marketing materials, including a confidential memorandum, that will showcase your business in a positive way.
Market Your Business
The next step is to determine how to best reach the right buyers for your business. There are many avenues a business advisor can use to successfully market a business for sale. This can range from using buyer lists or posting on digital platforms. Strategic research about other companies in the same industry will offer insight into the types of buyers you want to target – either individuals or strategic buyers who want to merge their businesses or acquire new ones.
Essential to the marketing process is to only share information as needed for each stage of the process to potential buyers. The process begins with a 100% confidential advertisement to pique interest. Then, the advisor will target their advertising efforts and outreach targeted to appropriate purchasers. Once a potential buyer expresses interest and signs an NDA, the advisor will share a limited package of summary financials. Timing of the release of certain details is a successful strategy to keep the buyer intrigued, while protecting sensitive information about your business.
Another key activity for the owner is to continue running the business as if it ISN'T for sale, in order to maintain the operations and preserve value.
Negotiate the Transaction & Closing
The final stage of the sales process begins when an offer has been accepted by both parties. This stage involves due diligence, when the seller releases the most detailed financial information, including bank statements, tax returns, as well as negotiating the lease and allowing the buyer to obtain financing. Then there is the assignment of the lease, and helping the buyer obtain financing.
Once you submit the paperwork and all parties sign off, you can celebrate the successful sale of your business and prepare for your next stage — whether it is a new challenge, retirement, or something else.
Transworld Business Advisors has over 40 years of experience selling businesses. Our business advisors can walk you through every step of the selling process. We can help you determine the market value of your business, assist you in gathering your assets and financial documents, find a buyer, and finish the sale. After all, you want the best price for your years of hard work and effort. Using an advisor and having all your paperwork in order can only help maximize the profit on your business sale.
Contact Transworld Business Advisors today and schedule a FREE consultation to get started.
