Owning and running a business can already be really tough and when the time comes that you’re finally ready to retire or just be done with all the hard work, selling your business should be something that shouldn’t be as time-consuming anymore.
The truth is that selling a business can be hard and can take a lot of effort. This is why it’s important that you know what to do and who to do it with, in the first place. Selling a business will need careful planning and being as detailed as possible to score the perfect buyer.
You can always work with Baltimore business brokers to make the job easier for you, but there still are things that you should know before you finally sell your business and make more money from it. Here is everything that you should know and prepare when doing this.
Planning the sale
You should know that selling your business takes time. It’s best to plan the sale of your business as early as two years before you intend to. By doing this, you can start shaping and mapping out a plan for your planned sale.
This could help you become more organized when it comes to keeping track of the necessary records and other important aspects of the business that you’ll eventually turn over.
Surely, some people didn’t really see themselves selling their business when they started, but as soon as you think of doing this, you should already know how long you’re preparing your business for it and when you’ll be needing the help from brokers.
Determining the value of your business
As a business owner, you yourself probably already has an idea of how much you can make by selling your business, but the best that you can do is to get a third-party valuation that can help you get a more accurate and realistic estimate of how much your business is valued.
Part of this evaluation is checking where your business is in terms of sales, receivables, inventories, and assets. This will also include existing debts, liens, or loans that are under the name of your business. This is why it’s important to plan when you should be selling your business. It’s best to do this when debts are paid as those could affect your business’ value.
Cleaning up your financials
Part of preparing for the sale of your business is ensuring that your financials are prepared. The buyers will always aim for transparency when it comes to this. It’s best that you work with an accountant when it comes to preparing your business’ financials.
You also wouldn’t want to include personal or family financials with this as this could be seen as red flags by the potential buyers. What you should ensure is that all income in the last three years are accounted for and are all easy to read and understand.
Prequalify potential buyers
Selling your business can be very exciting especially when you already know how much you might get from it. However, there are many business sales that go through financing and this means that there still may come a time that deals just won’t fall through.
Prequalifying your buyers could help you avoid this. Make sure that you check this with your broker. In fact, the expertise of your broker will come handy when it comes to this. It’s best that you get a broker who knows the market in Baltimore.
Speaking of brokers, getting help is something that you should really consider. Many may have their own thoughts about this. You may have friends who would recommend doing this, while others may have had their horror stories.
It really only boils down to the success rate and reputation of the broker you are getting. You need to know if you’re on the same page with your broker for it to work. Think of getting a business broker as getting a real estate broker.
Selling a house is somehow similar to selling business. You both want the buyers to be worth it and for a business, you want to feel like it will be passed on to someone who could really handle it. A broker would help you get the perfect deal if both of you are aligned and are on the same page.
Always make sure that you discuss your terms with your broker clearly. Of course, getting a broker comes with a price and this should also be clear. Make sure you know how they will charge you for the sale of your business.