How do I sell my business? This is one of the most popular questions I get from my clients. You see, business owners spend little or no time at all in learning how to sell their business. This is seldom discussed on business trainings and seminars.
If you are one of those people who are contemplating on selling their business, this article is for you. In here, I’ll share some practical ways on how you can sell your business and get a fair amount in the process.
1. The first thing that you need to do is to develop a strategic exit plan. Before you go ahead and sell your business, ask yourself these questions; “Do I really want to sell my business and what am I going to do next?” You may think that this is a no-brainer but recent studies confirm that there are quite a few business owners who back out from the selling process just because they don’t have an exit plan in place. This leads to waste of time, energy, and money.
2. Determine the performance of your business. Is your business in good shape? Or are your sales/profits declining for the past couple of months? You need to know the actual performance of your business when you are selling it as this will have a direct impact on your tag price. Other people do not mind buying non-performing business but they are not exactly willing to shell out huge amount of money for it.
3. Know how much your business is worth. Deciding on your business tag price can be challenging as there are so many elements that you need to take into consideration (some are even subjective). However, there are rules of thumb and proven techniques that you can use. These include valuing business based on sales, based on profits or cash flows and based on assets. You can hire a business appraiser to do the legwork for you if you think that you don’t have what it takes to perform this task effectively.
4. Create a selling memorandum or a selling book. You will need to create a document that your potential buyers can refer to regarding the selling process. This is your best chance to present your business in the most outstanding light. Creating a selling book or a memorandum can save you headaches and precious time by not having to answer questions that potential buyers usually ask.