Have you considered your exit strategy for your business? Selling a business is typically the most popular option, but how do you get the best price? What if there are no successors? Can you convert your business into liquid assets? Here are some tips to maximize your sale price!
Timing and motivation are key.
Unfortunately, too many business end up selling because someone falls ill or gets too old. This is the worst time sell your business. One your health may not be able to handle the stress, and two the prospective buyers may use your health as leverage to get a better deal. So be sure to have a plan before these circumstances creep up.
The next question to ask is why are you selling? What’s your motivation? When selling a business, you want to sell because you want to pursue a different opportunity or because you’re seeking a different lifestyle (like retirement). Knowing why you want to sell helps you understand when you may want to sell.
Know what you’re selling.
Have you considered what the assets of the business are and have you decided on just exactly what you are selling? What physical assets , what intangible assets, what trademarks, what client lists are you selling? What are they worth to the company? What are the quality of your assets?
Determine what your business is actually worth.
Just like a house your business is only worth what someone else is willing to pay. Determining the price to ask, however, is a bit of an art. Have you considered the valuation methods you’re going to use? It is imperative to have a professional business valuation done.
Clean up your records, pay your taxes, make everything clean and easy to move on.
Just like if you were selling your home, you want your business to show well. The only way to do this is to get everything cleaned up. So get your books in order, understand your inventory, pay your taxes, etc.
Get a business broker when selling your business.
Selling a business is NOT like selling a house so stay away from a realtor. Realtors know houses, not businesses. If your realtor doesn’t understand EBITA it’s time to walk away and find a business broker to help you. Hiring a broker can help keep your emotions at bay.
Get the best team working for you.
Selling a business is very serious and potentially very emotional. It is probably the biggest decision you will make in your life. Make sure you take the time and trouble to do it right. So get a good team on your side, know what you know and more importantly know what you don’t know. Let your team take care of the rest.
About Brightblue Transition Solutions
Located on Vancouver’s North Shore we are the premier business broker in the lower mainland, contact us if you need any help buying or selling a business in the greater Vancouver or lower mainland areas.