Running a business might not be something that you envision doing for the rest of your life. Maybe you want to retire now that the company is successful, or perhaps you want to move on to a different industry or a more challenging role at a different company.
Of course, if you have invested your time and money in the creation of a business, you might consider a sale of the company rather than a dissolution. Selling the company can mean capital for your next venture and job security for the employees that you have hired and likely grown fond of over the years.
How do you prepare to sell your business?
Address liabilities and weak points
The first thing you need to do is to take honest stock of your company’s situation and identify its biggest liabilities and weak points. Those issues could drag down your asking price or scare away potential buyers.
Whether you have a significant debt or unfavorable contracts with some of your vendors, now is the time to address those issues. Not only can your proactive identification and resolution of your company’s biggest liabilities make your company more attractive to buyers, you might also be able to ask for a better price when there are fewer drawbacks to the purchase. Finally, reducing these liabilities can also allow for a smoother transition when the deal is closed.
Perform an honest valuation
Determining what your business is truly worth is a challenge. There are so many moving pieces to consider, and the economy is notoriously unpredictable. Although you can certainly estimate future revenue, there is no guarantee in business.
To make money on the sale of a business, you have to have a reasonable idea of what the company is worth based on its facilities, assets, debts and contractual obligations. In some cases, you may need to bring in an outside professional to appraise the business and set a realistic sale price.
Plan ahead for a smooth transition
You may need to commit to staying on to work as an employee at the company after the closing, to help train your replacement and smooth the transition. You also need to prepare for the very real possibility that some of your best talent will consider leaving the company when you do. You can address common transitional issues before you even start looking for a buyer for the company.
Even if you are accustomed to handling major business transactions, you may need support when it comes to the sale of a business. Taking the right steps to prepare will increase your chances of a successful business sale. Call attorney Mark Tebelius today at 651-738-3433.