IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog has been provided by Vivek Mukherjee of Inspired Expartriots (https://inspiredexpatriates.net/):
How to Know When It’s Time to Sell Your Business
If you’ve started a successful business from the ground up, you’ve achieved a major accomplishment. While you’re undoubtedly proud of your business, you may not want to hang on to it forever. Many business owners aim to sell their enterprise for a profit. International Business Associates, IBA, helps successful entrepreneurs like yourself sell their businesses so they can move on to other things. Read on to find out how it works.
Know the Signs that it’s Time to Sell
Selling a business takes a lot of effort, so make sure you want to go this route before proceeding. How can you know if the time is right? According to Forbes, you might sell if your business has outgrown you, new partnership opportunities have arisen, or you’re distracted and no longer focused on your enterprise. Changes in your industry are also worth considering. For instance, if your industry is shrinking, you may want to get out now while it’s easier to sell.
Determine your Company’s Value
If you’ve decided it’s time to sell your business, the next question is logically how much it’s worth. You want to know what you can expect to get from a sale, ensuring it’s a fair price. Towards this end, you will need a business valuation. The Balance explains that this is an appraisal for a business. It involves looking at all of the company’s tangible and intangible assets as well as debts to determine its worth. This will be used to negotiate with buyers.
Get your Paperwork for a Sale in Order
Selling a business requires a lot of paperwork. Prepare accordingly. Getting your documents in order in advance will streamline the process and save you headaches later. In addition to the business valuation, you’ll need certain financial documents like tax returns, financial statements, and a list of assets. If you have a financial advisor, tax specialist, or bookkeeper, work with them to get up-to-date copies of your essential paperwork.
Find and Qualify Potential Buyers
Once you have your paperwork in order, it’s time to start finding buyers. IBA can help you find qualified people, taking the hassle out of the process. They can also help you get buyers. You want to be sure that anyone who approaches you has the funds to close the deal quickly and the experience to keep the business running smoothly. When interviewing buyers, ask about their background and how they plan to pay for the purchase.
Conclude the Paperwork to Close the Deal
Once you’ve found a suitable buyer, there is still some paperwork to get through. The buyer will likely request copies of financial statements and other relevant documents before signing on the dotted line. Then, you have to negotiate the actual terms of the sale. Key details of a sales contract include the items for sale, the parties involved, the disclosure agreement, the adjudication process, a confidentiality agreement, and more. Have a lawyer review this.
Prepare for your Next Venture
Saying goodbye to that business when you sell it can be tough. However, keep in mind that you are opening yourself up to new opportunities by doing so. Maybe you want to start a new company, for example, or pursue continuing education. You can earn an online degree from the University of Phoenix to give you the knowledge you need for your next step. There are more than 100 programs covering topics like business, IT, and health administration.
Building a business from the ground up takes time, effort, and investment. Similarly, selling a business demands strategic planning and forethought. The right professional help can make it easier. Trust the guide above to help you through the process.
For more content about successfully buying and selling a business, check out the IBA blog.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.