Selling a small business is sometimes stressful during the process since it needs to have a concrete plan and research in order for the selling process to run smoothly. Owners must ensure that they maximize their returns of the said business venture, regardless of whatever reason that they choose to sell it. Understanding helpful steps to sell a small business and applying them will help the transition as easy as possible.
Step 1: Identify the Value of Your Small Business
Before you put your business in the market, you first need to assess the current value of the business. You should research or ask for help so that you have an idea on the selling price based on the depreciation of your assets and earning potential. You may inquire from professionals like accountants, brokers and experts for a fair estimate of your business.
Step 2: Get Ready with your Financial and Legal Documents
Interested buyers would love to review and see your financial statements, any reports supporting the profits and loss of the business and all the legalities in the said venture before they make an offer. These documents will be their basis in their decision making if the property is worth buying for long-term plans. Just see to it that all your documents are updated including the tax returns and all the possible obligations are already resolved. Having these documents ready makes the selling easier and faster.
Step 3: Finding the Right Buyer
Finding the correct buyer takes a lot of time and effort to do. You must find the people who have the same interest in business as you. You can find the buyer from marketplaces online or listing businesses. It is a plus that you can find buyers that are financially capable and able to handle businesses successfully for a smooth transition. These people know how the business and the industry works so it’s easier for them to understand without explaining to them from the very beginning. You can also build that confidence that these people can manage your business and all your hard work will not be put to waste.
Step 4: Negotiate, Close the Deal and Transition Smoothly
When a buyer shows interest, then this is the time that the negotiation happens between parties. This involves discussing the pros and cons, coming up with the sale price and any conditions if there are any. This is also the time that you will discuss the transition period, process all the legalities and payment method. In this stage it is better to have the assistance of the broker and lawyer with regards to the agreement.
After the agreement, then the transfer of ownership will be processed next. Signing of the contract and transferring all the licenses and permits, giving notice to all people involved. It is the responsibility of the old owner to guide the new owner in the transition process and support the new owner to maintain the stability of the business for long-term goals.
Selling small businesses still requires thorough planning and research when it comes to the execution process. Following the steps given above will at least help you process and transition smoothly. Guidance from professionals like lawyers and brokers will make the process bearable.