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You’ve decided that you want to sell your business – but are you and your business ready? Just like selling a home, selling a business can be a complicated process. Your business needs to be in a good state so that it appeals to buyers. There may also be paperwork to consider and professionals worth hiring to offer support. This all needs to be done before you start marketing your business. Below are just some of the measures worth taking.
Reduce your debts
It’s possible to sell a business with debts, but it isn’t easy. Paying off as many debts as you can will help your business to look a lot more attractive. Consider first consolidating your debts – one large debt will look better on paper than multiple small debts. You should then aim to throw as much of your profits as you can at paying off these debts. There are debt relief agencies that may be able to help.
Settle ongoing legal disputes
If there are ongoing legal disputes, these will also need to be solved before you put your business up for sale. Look into litigation solutions so that you can find a way to solve these disputes quickly and peacefully. Be careful of the financial damage of these legal disputes – if you’re already trying to pay off debts, you don’t want to be adding to these with more debt.
Get your accounts in order
You should also make sure that all your accounts are up to date. Many businesses aim to sell their business at the end of the tax year so that last year’s tax has been filed and paid off. You may want to hire an accountant to help you get everything in order and to make it all presentable.
Tidy up your premises
A quick makeover of your premises could also help when attracting buyers. You don’t need to fully refurbish your premises, but it could be worth adding a new lick of paint, decluttering and giving a deep clean.
Correctly value your business
Many business owners overvalue or undervalue their business. On average, most businesses go on sale for two to three times their annual earnings. Allow some leeway for negotiation – many buyers will try and barter with you.
Get contracts in order
You’ll also need to write up a business sale agreement. This should contain all the terms and conditions of which the buyer must adhere to such as keeping on old employees as well as not disclosing any private information about the sale until it is carried out. You’ll probably need a solicitor to write this out.
Plan out the transition phase
Don’t expect to hand over the keys to the person buying your business and be done with it. A transition phase of a few months will likely be needed so that you can guide your company’s new owner through all the processes. It may also be important to introduce them to your employees, suppliers and any loyal customers you may have. You can gradually then relieve control until you are confident that they are able to take over.