When you’ve gotten to that point where you decide it’s time to sell your business, you’ll realize it’s tougher than you thought.
You’ve put in a lot of effort to build your business from ground zero to whatever level it is. The selling point is now the biggest call you’ll have to make when it comes to your finances.
Selling a business is anything but easy. There are a lot of factors you’ll have to consider. You don’t just wake up one morning and decide to sell your business.
If you are not careful with the process, you risk selling your business for a price far less than its worth.
Now if you’re a small business owner, this will mark a major break in your entrepreneurial journey if you do it rightly.
Below are some surefire tips to help you sell your business and enjoy the compensation for all your hard work.
How to Sell your Business in 6 Foolproof Ways
- Evaluate the Worth of your Business
The first step to selling your business is by evaluating its value. Your negotiation skill and every other skill you have in handy when it comes to selling will be pointless if you don’t know the value of what you are selling.
Most business owners struggle with the task of evaluating the worth of their business.
And that’s partly a good thing so they don’t evaluate wrongly and undermine the business at the negotiation table.
The value of a business is weighed with a few metrics like its general financial health, the niche or industry that houses it, its market value, inventories, staff capacity, sales, debt, location, amongst a couple of relevant indices.
If you can’t pull this off on your own, you might need to hire a business broker of analysts. This might cost you financially, but you will get the right value of your business up to 90% accuracy.
Hiring a third-party analyst can also help you appreciate the value of your business and help you prove its worth at the negotiation table to any buyer.
- Tidy up your Books
Every potential buyer will love to scrutinize your record. It’s only natural to know what they buying or getting into.
Your records need to be clean. If there are lots of question marks cluttering it, the value of your business depreciates at the table if it’s going to sell at all.
To tidy up your books, your accountant and business attorney who are already aware of the plan, can help you get this done.
By looping them in, you can have your business records completely reviewed and overhauled especially when you’ve not been too careful about records.
If you’ve however been so meticulous with bookkeeping, this might just be a walk away step for you.
Nonetheless, a thorough review alongside your accountant and attorney can prove to be very effective in persuading potential buyers to dole out the cash for your business.
When all your I’s have been dotted and T’s crossed in terms of records, you leave nothing to chance and mitigate the risk of your business being undervalued in the eyes of buyers.
- Work on your Curb Appeal
The curb appeal of your business is how desirable it appears from the viewpoint of a potential buyer.
Just like selling a house. You need to refurbish it or make some improvements to its curb appeal. No one will be willing to buy a house that’s almost a wreck, at least not for a reasonable price.
So the homeowner fixes every part of the home that needs fixing and paints the exterior amongst other improvements to increase the curb appeal of the property before a sale is made.
This selling strategy can be applied to your business to increase your chances of selling it at a price you’ll love. So step out of the business environment or property. Now take a long and hard look at the business from a buyer’s perspective and ask yourself if you’re going to buy this property the way it is.
If you can’t answer in the affirmative, then you need to rejuvenate the curb appeal of your business.
- Plan an Exit Strategy
Selling your business and asking yourself “so what happens now? Afterward is a position you can’t risk getting into.
You need to plan everything from start to finish before handing the papers of your business to someone else.
An exit strategy involves you brainstorming on ways to answer the big question “What Next? After selling your business. That’s the ultimate question.
It will be followed by questions like;
- Can I survive without the income I’m generating currently?
- What will I be doing in the meantime before reaping the benefits of a new business?
- What challenges will my buyer encounter that will involve me going back to fix?
These and many more are the questions you need to add to the big one of what next or what you’re going to be doing with your life following the sale of your business.
This exit strategy is paramount because in the process of fielding these salient questions you’ll be asking yourself, you might have a rethink.
The answers could convince you it’s not yet time to sell your business or make you prepare ahead for life after a business sale.
- Run your Business the Usual Way
That you are about to sell your business doesn’t give you the liberty to be laid-back and slothful.
This is a sequel to the curb appeal point. Your buyer needs to see that the business is booming as proof that he won’t regret staking his hard-earned cash on it.
So keep up with the running of the business pretending you aren’t close to selling it. Let the sales improve and let the staff morale be high.
Talking about staff, if you have them, you need to let them in on what’s about to happen so they can plan their exit strategies as well.
But before the deal sees the daylight, let the working spirit be at an all-time high. If you’ve got no staff, things are a lot easier for you.
The goal is to keep the business active when the buyer comes for examination. You won’t have many persuasions to do when the buyer sees live evidence of the value of the business.
- Now Sell your Business
With all factors considered and every strategy in place, you can now sell your business.
Selling your business can be done in three ways. They are;
- Direct Business Sale
- Business Broker or
- Investment Banking Agency
7.Direct Business Sale
You’ll be selling your business all by yourself. This comes with the perks of not paying anyone any commission for helping you with the sales.
However, it doesn’t mean you will end up with the best selling price. You only cut down costs on associated fees.
You can sell your business yourself by placing it online and by word of mouth.
Here is how entrepreneurs in the EU sell their businesses seamlessly using an online platform.
To sell your business personally, you will need to consult other entrepreneurs in your business niche who have sold theirs.
This is necessary to gain insight into how it works and if the direct sale means of selling is the best option for you.
With due research, selling your business directly can turn out to be favorable financially since you won’t be compensating anyone for their assistance.
Most successful businesses usually employ the services of a business broker to handle everything about the sale of their business.
The business broker will have to evaluate the worth of the business, scout for the best buyer, and see to the end of the deal.
A business broker can charge anything between 10 – 15% of the selling price.
When looking for a business broker, find one that has sold your kind of business. The previous experience of the broker will prove to be valuable to the entire deal.
9.Investment Banking Agency
Investment banking agencies are similar to business brokers in the manner they operate. The only difference is that investment banking agencies are for larger businesses, or simply put “business corporations” with a large network of branches.
As expected, their charges will be higher and the nature of their work, very tedious.
Selling your business is a great idea. For one, you might want to invest in a bigger one and thus, left with no choice but to sell the present.
The prospects are great if it’s a well thought out plan.
However, the process of selling your business isn’t as easy as saying “hey there! My business is up for sale, come and buy”. No, you aren’t selling peanuts or ice cream.
It takes a lot of strategies, consultations, and critical thinking to Successful sell off your business. Some of the tips and strategies shared in this article can help you sell off your business successfully.
You just have to be patient, optimistic, and implement what you’ve learned to the latter.