Whether you feel the market has hit its peak or you’re considering retirement or a career change, when it’s time to sell your business, there are some critical tips to keep in mind throughout the process.
First, ask yourself why you’re selling the business. If the business is failing and you’re in over your head, understand that you won’t get anywhere near full value for the business. Think of it like a car. A brand new or nearly-new automobile that has been tuned up regularly and runs like a dream will demand top dollar, but the clunker sitting on concrete blocks will only attract those who are looking for a turnaround project – and they usually go as low as they can when making a purchase. On that note, perform due diligence when evaluating the business and then ask a realistic price for your market. Otherwise, your business could end up lingering on the market for quite some time.
Secondly, get a sense of what it is you’re selling. Is it land, building and the business itself or just the business? Are there trademarks involved? Do you want to ensure your current employees stay on for a period of time after the sale? Also, decide whether it’s an asset sale or a stock sale you’re interested in. In an asset sale, the buyer acquires assets and liabilities, but in a stock sale, you give up your share of the corporation.
Finally, consider working with a business broker. Whether you’re buying a business or selling one, a business broker often brings years of experience to the table. They can help you avoid potential pitfalls and common mistakes that could set you back in your efforts to sell. If you’re uncertain where to find a business broker, start with the International Business Brokers Association (IBBA), the world’s largest community of business intermediaries and brokers. With the right broker by your side, you will be able to maximize the value of your business without the headaches of going it alone.