Selling a business might sometimes seem like a much greater challenge than building it up from the ground. While it would be impossible to list all the possible complications that you can encounter in the process, we decided to give you an overview of the possible issues and requirements of the procedure.
Knowing when to Sell
While some businesses are forced to sell and not really able to choose their own time frames, others have the luxury of starting the process at the ideal moment. While some owners will panic when the business starts losing money or encounters difficulties that seem insurmountable, if you decide to sell your business while it is at its most profitable, you’ll not only get a much better price, your negotiations will be much smoother, as the buyer will be both more eager to buy and more trusting. Naturally, most people will be hesitant to sell their business when it peaks, but those with an entrepreneurial spirit will welcome the opportunity to gather investment funds for their next project.
If you can afford the time, it would be ideal if you knew that you are going to be selling the business some two years in advance, as this gives you enough time to get all the papers in order, deal with all the tax issues, and generally, be prepared for any eventuality. You should also prepare for dealing with your employees in a properly and in a timely manner, so you would not breach your employment contract.
Sorting Your Books
The potential buyer will come with a team of experts meant to analyze every possible aspect of your business, so you better be prepared if you want the transfer to go smoothly. This can be a bit of an issue if your records are sloppy, or if you have been making deals without putting them on paper. Naturally, the best way to avoid this is to run a tight shift from day one, keeping records of every transaction and deal that you make, as backtracking and finding outdated information can be excruciating, and at times, even impossible.
You’ll need your own team of industry experts and lawyers to make sure that you have all the pertinent documentation, and enough time for them to do their jobs. This is why, even if you are not currently planning to sell, you might want to think about getting your books in order while there is still time.
Distance Yourself from the Business
More often than not, especially when small businesses are concerned, the owner is the heart of the operation. While this may be perfectly natural, the prospective buyer shouldn’t think that the business will fall apart as soon as you leave. That’s why you have to make sure that the business can run smoothly even without you in the picture. You can do this gradually, by relegating your responsibilities and power to other members of your team.
Naturally, there is no way to guarantee that any of your employees will be able to keep their position under new management, but you need to ensure that your business will be able to continue making profit even once you are not there to manage it.