Selling Small Business – Checklist
You’ve given it your all to create a business worth selling. You’ve also grown and developed yourself as a result. And now it’s time to let it go and move on to your next exciting venture. When it comes to selling a business, it takes knowledge and preparation to get the best result in the shortest amount of time.
Each business is unique, with its own merits and intricacies.
If you are unsure about how to sell a small business, then it’s worth taking note of all the points in our handy checklist below.
When is The Best Time to Sell?
Many business people might think the best time for selling their business is during tax time. Any company has slow and busy times, and it is always better to sell your business when your cash flow is positive since it will attract the right buyers.
Where to Sell a Small Business?
Some might think that selling a small business would be a simpler sale. But remember, there is a buyer for each type of business. So, when it comes to where to sell a small business, all you need is the best marketing approach.
Companies in a lower bracket generally attract buyers through advertising or listing their business on platforms like ExitAdviser, while larger corporations are usually sold by knowing who is in the market for buying and approaching them directly.
First-time buyers generally buy small businesses since it brings in enough revenue for employing staff and expanding the business.
How to Retain Clients?
Having a strong client database definitely works in your favour when you are selling your business. It is more cost-effective to keep a present client happy than it is to obtain a new client. It is recommended to tackle the sale and transition to new owners in stages. This gives you enough time to introduce the new owner to your clients and systematically get them used to the idea of transition.
Managing Your Buyers Expectations
Sales figures play a role when you sell a business. However, having sales figures on the low side is not unmanageable. Older firms might have increased their turnover over the years and may be considered unaffordable. The new buyer would certainly want to boost the company’s sales, yet it’s important to remember that Rome was not built in a day. It takes effort and time to introduce a new business, therefore it is more about managing the expectations of a buyer and allowing the transitioning to happen in stages.
Looking Forward to a Bright Future
Possible buyers will obviously look at your company’s past performance, but it is vital to focus on the business’s bright financial future. Maybe you have recently employed more staff, or introduced a new product, or gained new clients. Anything that could increase your turnover going forward is worth mentioning.
Justifying the Risk
No problem is insoluble as far as selling a business goes. It is crucial to not allow emotion to cloud your mind and remember that almost anything is negotiable. There is a way to mitigate almost all risks.
Maybe there is someone inside the company that is interested in taking over the business. It might seem like the perfect solution for selling a small business at first glance. However, it is critical to look at the proposal on all its virtues. This is not the time to let emotion get in the way. The proposal must be strictly considered from a business point of view.
How to Sell a Small Business?
Preparation is paramount, no matter the size of the company. The more prepared you are, the best outcome you will have. Start the planning phase at least six to twelve months ahead, so that you can evaluate your performance and make some improvements or changes to make the business more attractive to potential buyers.
I hope this selling small business checklist will be of use to you and that you will incorporate some of these suggestions to ensure you are selling the business as quickly and painlessly and with the best possible outcome.
Did we miss any key pointers on selling a small business in our checklist? Share your views in the comments section below.