What do I do when I sell my business?
If you’re considering selling your small business, consider these seven steps to stay on the offensive.
- Determine the value of your company.
- Clean up your small business financials.
- Prepare your exit strategy in advance.
- Boost your sales.
- Find a business broker.
- Pre-qualify your buyers.
- Get business contracts in order.
What does selling a business entail?
Definition: The process of putting your business up for sale by an individual or other company. Just as you needed a plan to get into business, you’ll need a plan to get out of it. Selling or otherwise disposing of a business requires some forethought, strategizing and careful implementation.
What is the best way to sell your business?
7 Steps to Sell Your Business (in 2021)
- Determine what your business is worth.
- Prepare your financials with your accountant.
- Find a broker or investment banker.
- Develop the executive summary of your business.
- Put your business on the market.
- Field offers from potential buyers.
- Let the buyer perform due diligence.
How do you price a business to sell?
There are a number of ways to determine the market value of your business.
- Tally the value of assets. Add up the value of everything the business owns, including all equipment and inventory.
- Base it on revenue.
- Use earnings multiples.
- Do a discounted cash-flow analysis.
- Go beyond financial formulas.
What is a small business worth?
Businesses where the owner is actively-involved typically sell for 2-3 times the annual earnings of the company. A business that earns $100,000 per year should sell for $200,000-$300,000. This is consistent with most listings on BizBuySell, a small business brokering site with thousands of companies available for sale.
Is it better to keep your business or sell it?
One reason to keep a business rather than selling is if you think you can grow it through your own efforts. You might be able to adjust pricing, explore additional sales and marketing channels, or perhaps bring in new products. There are lots of levers you can pull to try and grow a business. Have you explored all of these options?
How long does it take to sell a small business?
Finding a Buyer A business sale may take between six months and two years according to SCORE, a nonprofit association for entrepreneurs and partners of the U.S. Small Business Administration. Finding the right buyer can be a challenge. Try not to limit your advertising, and you’ll attract more potential buyers.
How long should the seller stay after buying a business?
Keeping the seller onboard for a reasonable and effective transition period can be the difference between success and failure for a business buyer to be certain the business gets off to a smooth start under their ownership.
What’s the best way to sell a small business?
Selling a small business is a complex venture that involves several considerations. It can require that you enlist a broker, accountant and/or an attorney as you proceed. Whether you profit will depend on the reason for the sale, the timing of the sale, the strength of the business’s operation and its structure.
What happens to your employees when you sell your business?
As a business owner, selling your business is usually cause for a celebration, or at least a giant sigh of relief. But for your employees, the picture is quite different. At its best, imagining life after the sale is a murky nightmare for most employees. What’s worse, without proper planning and action, their nightmare can quickly become yours.
What makes a successful business owner go out of business?
The new owner may lack business experience, have a closed mind or be a poor leader. The list goes on and on. A successful business owner makes it looks easy, but change that mix and disaster may strike. When this happens, the new owner ends up going out of business and leaves the previous owner holding an empty bag.
When do you have to sell your business name?
Establish the right to sell the company’s name: When a business is named after the owner and only the owner, then that individual has direct ownership of the name. For example, consider the business name of “Kevin Comstock Farms.” However, if the business name is not trademarked, then it is not protected by law without authority to sell it.
What should I consider when selling my business?
Consider your industry, similar businesses, the economy and your marketplace when pricing your business to sell. On the other hand, a business that does not generate profits may do well with a going-out-of-business sale. This type of sale can generate instant cash flow and quick turnover.