Do you have a business that you might be thinking about selling? If so, there are some quick things to do before the sale goes through. This is important because even though your business may seem like it has been doing well for years, there are still many aspects of your business that you should consider and not leave to the potential buyer.
Here are a few areas that will help make sure everything will run smoothly following the sale of your company.
Evaluate the Worth of Your Business
Before you start looking for a buyer, you must know how much your business is worth. If your company’s value isn’t high enough, then trying to sell it could result in a loss instead of a gain.
To help you determine the value of your company, there are a few things to consider. The current market conditions in your industry. For example, sales might be going up right now because businesses have increased spending due to tax cuts, but if this is simply a temporary increase, then selling at that time could result in less profit than when selling later on down the road.
Secondly, how well run is your business? If management has been doing a poor job at increasing profits over recent years, there may still be room for improvement, which means it wouldn’t make sense to sell. Thirdly, what are your business’ assets? Your company’s value might be higher than you think since many companies do not know their worth.
Start by looking at all of the things that make up what you’re selling (location, equipment, patents). If newer technology is available, it would be smarter to sell. At the same time, the industry still values older models and vice versa if there aren’t as many customers willing to pay for new technologies yet.
How much debt does your company have? First, you need to remove any liabilities from total profits before determining how much money you made with your business over this period. It may seem like a lot, but remember that those debts could eventually come back around and bite people in the future, so keep in mind that a business with less debt is more likely to succeed.
Check for Any Damages and Repair
This is a no-brainer and should be the first step in any business sale. If you haven’t checked your property for damages, now would be a great time to do so before you get an offer for it. First off, check the roof of your building or warehouse to ensure no severe leaks need repair.
Also, if your building or warehouse has updated electrical wiring, make sure that everything is in working order and up to code. This will help the new buyer with costs and potential liability later on if something happens like a fire or flood because of faulty equipment. If your building has had any recent water or flood damages, be sure to hire a commercial flood damage repair company to ensure your commercial building is market ready.
Ensure All Machines Are Functional
This is an excellent place to start. Imagine visiting the business for the first time; how would it look if only one machine was in working order? Chances are they will walk away. This is a great way to set the standard and impress with your professionalism immediately.
Another quick win is to ensure you stock all working machines with consumables. This includes the paste, labels, and any other stationery needed for production. A simple step like this can go a long way in demonstrating how well your business gets support from suppliers and will leave them feeling reassured that you have thought of everything.
Check the Timing of the Market
The timing of the market is imperative to consider when you want to sell your business. Knowing when you can get the best return on your investment is essential. Some months are better than others for selling a business.
For example, late summer and early fall are generally the best time to sell a business when people have more money. The holiday season can also be good for selling your business because companies often put off buying decisions until after they’ve had some downtime over the holidays.
Work with a Business Advisory Team
This team should have people who will look at your business as objectively as possible. They’re going to tell you what you need to hear, not just what you want to hear, and they should have a good amount of experience in the industry your startup is serving.
You don’t want them giving advice based on their own biases. They will go over your company’s financial records to determine the best time for a sale, and they can also help you calculate a fair price based on their experience in valuing companies like yours.
Be careful with consultants who try to push you into selling when it might not be right just because they’re trying to drum up more business. If you’re unsure who to work with, ask other entrepreneurs and investors in your network for references or search online for companies specializing in selling tech startups.
Alert Your Workers on Time
Most businesses are not organized around the idea of exiting. It can be challenging to work with workers, and you must tell them as soon as possible, so they have time to prepare for this change in their lives.
Please don’t wait until your business is ready to sell before telling employees; give them plenty of advance notice and let them know what to expect.
Hire an Attorney
If you are considering selling your business, the first thing to do is hire an attorney. The last thing you want is to get bogged down in a lengthy and expensive sales process only to discover that the deal fell through because of some small detail or clause that got overlooked.
An attorney will help make sure this doesn’t happen by drawing up the relevant documents and ensuring everything is in order. Having an attorney representing your business will also increase its value, essential because you want to get the best price possible when selling a company built from scratch. You can’t go wrong by investing in legal representation since it always pays off if you manage to strike a deal.
Deciding to sell your business is a difficult one, but it can also be gratifying. The above are just some things that you will want to do quickly to avoid losing out on any potential gains.
