Selling a business is a complex process. There’s far more to it than most business owners realize. These ten proactive tips will help a first-time seller prepare to sell their business for the highest value.
1. Use a Professional Advisor
A professional, experienced and qualified sell-side advisor will provide an accurate assessment and valuation of the business, market it effectively, solicit offers, qualify buyers, protect confidentiality, assist in negotiations and facilitate the closing process while you remain focused on running the company.
2. Hire a CPA
Accurate historical and current financial reports are vital to selling your business for the highest value. Have a CPA compile monthly financials and file tax returns on time.
3. Plan for Taxes
Consult with your CPA to develop a tax strategy for the proceeds from the sale of the business.
4. Watch the Expenses
Limit personal expenses that are run through the business. Excessive personal expenses are hard to explain, will raise concerns and can reduce the value of your business.
5. Limit Changes
While listed for sale, consult your professional advisor before making significant changes as the value and salability of the business could be impacted.
6. Keep It Clean
A clean, well-organized business shows better and improves perceived value. Your advisor should provide you with a “things to do” list to prepare your business for sale that includes housekeeping tips.
7. Manage Inventory
Perform a full inventory. Dispose of old, obsolete and non-saleable items. Conduct periodic inventory audits to ensure accuracy is maintained.
8. Ensure Everything Works
Dispose of broken, out-of-service and non-utilized equipment prior to listing the business for sale. Maintain the facility, vehicles and equipment to ensure everything is in good and proper working condition when the business is sold.
9. Have an Open Mind
Negotiating the sale requires give-and-take between the parties and is part of every deal. Have an open mind during negotiations, and use your advisor to help you make objective decisions.
10. Be Committed
Selling a business takes time, and there will be challenges. Trust your professional sell-side advisor, and remain committed to your goal of a successful sale.