When you decide to sell your business, it is important to ensure that the deal is profitable. Selling a business is much similar to selling a house or a car but there are certain differences in transactions that exist. If you are thinking of selling your business, it is important to do it at the right time and do business with the right buyers. There are also certain essential steps that you have to go through when transacting this kind of business.
You need to understand that there is more to selling your business than hanging the ”For Sale” sign on the front door. Selling your business is a very vital process and thus has to be treated with the seriousness it deserves. Selling a business is not just about the amount of money you will get from the deal but rather whether you are really the right person to handle the sale process. Here are the steps that you will have to go through. From that, you can decide whether you need the input of a professional or not.
1. Valuation
How much is your business worth? This is the question that you need to answer in this case. No one really understands the value of their property until it is time to sell. There is different valuation criteria applied to a wide range of businesses. For instance, if your business is pretty much profitable, you will not use the same valuation measures for it like you would do for a business that is marginal or operating at a loss. Every industry has its own sort multiplier. Perhaps, in this case, you would have to bring in the input of a professional to do the valuation part.
2. Strategy
When you want to sell your business, just like you would do for a house or a car, it is important to have a well laid out plan for the same. You need to generate written documents about what you are doing. You also have to process any legal documents that might be required in the process. A strategy is like a roadmap. It gives you a sense of direction and guides you to attaining a profitable experience.
3. Package your business product
In this case, you probably have spent some time and money in marketing your business and building a brand out there in the market. You also need to feed in the same amount of effort and even more into packaging the business that you are selling into some awesome buying opportunity. When you want to sell your business, you have to switch your focus to the potential benefits that the buyer would get; be it patents, terms and even the affordable price.
4. Come up with a marketing plan
This is another very important element to consider when selling your business. Before you can even think about advertising the business on sale, you ought to think about how you would like the buyers out there to know about your business. Creating a marketing plan helps to ensure that your marketing campaigns are targeted to the right people. This works hand in hand with the strategy you laid out earlier. You might want to market to a broader audience but this might just generate leads and not boost sales.
5. Negotiations
This is where the real business now starts. It involves you and the potential buyers negotiating and agreeing on terms. When you are negotiating the price of your business, you need to understand that this is not just about price. It is rather important to consider when, how and what conditions prevail. You have to get the limits right before you start on the process of negotiations.
6. Closing
This is one part of the transaction where you will have to call on the input of a number of parties. It also requires some element of managerial skills. Here is where you have to coordinate and do business with lawyers, leaseholders, suppliers, banks, accountants and many other players.
7. Transition and exit
This is the final phase where you have completed selling your business, you have handed over the ownership to the buyer and everything has been settled and put down on paper. It is time to now get your emotional connection away from the business and concentrate on other important issues in your life.
Contributor Profile: This article is owned by For Sale For Lease – a Sell My House Real Estate Agency, and is published here in realestatebyjulian.com with permission.
