Five ways to prepare to sell your small business to reap the biggest reward
Even if your plans to sell you small business are several years away, you need to start planning now in order to get a great price when the time comes. Begin by documenting all business deals to show business connections. Also, ensure that any deals on paper are reviewed every year or so for accuracy. Risk in your businesses’ operations means a reduced price so it’s important to diversify and plan for long-term growth even if it means slightly reduced near term profits. Someone buying your business will perform due diligence, so make it easy for them to see the value in your business by cleaning up your accounting records and books. Family members may be great potential employees, but not hiring will make it easier to sell your business. Finally, a little goodwill at the end by offering to stay around and help during the transition will go a long way.
Key Takeaways:
- Make sure to have things written out and organized, this includes current business deals and clients, and keeping your financial books in order.
- Important to selling a business is minimizing the risk involved for the buyer by creating a stable, reliable business which insures that the buyer is confident of their purchase.
- Family businesses are common, but having the business revolve around the family too much makes it difficult to transfer or sell the business to a new owner.
“A lower-profit, lower-risk business can be more valuable than a more profitable, all-eggs-in-one-basket shop. So, focus not just on maximizing profit, but also on managing risk.”