Deciding to sell your business is a big decision. But before you put a For Sale sign out front, follow these simple steps. These 7 action items can help you get the most for your business, and set you up for a smooth sales process.
- Get your finances and financials in order – A new buyer is going to only pay for what they can document. If you are using the register as an ATM, stop. You need to declare all income and only write-off real business expenses. You may pay more in taxes, but you will make up for it in additional sales price. Clean up your financials. A buyer is going to look at our bank statements, invoices, etc.. If you have NSFs, or past due bills get in shape. A buyer who sees those red flags is likely to move on or greatly reduce their offer.
- Get your employment situation in order – If you have family members on the payroll at inflated levels, reduce them. If you have problem employees that need to be replaced, replace them. If someone is due a raise, pay them. A new buyer needs to count on a stable workforce and have an accurate payroll in place.
- Get your social media in shape – Check all forms of social media both business and personal. Are there post that need to be deleted? Are you still offering coupons from 2003? Does your social image match your brand? Check your ratings and reviews. That is the first thing a potential buyer will look at. If you have negative reviews, have you solved that issue? Have you responded to inaccurate reviews? Have you asked your best customers to add a review lately? Social media will be reviewed before a buyer ever sees your business, it is the new first impression.
- Get your physical space in order – Does your store, shop or vehicle present a positive image? Repair cosmetic items, organize inventory, and reduce clutter. A prospective buyer will most likely secret shop you and will definitely tour your location prior to making an offer. A buyer will assume a messy space equals a messy business. They need to be able to see themselves in your business and take mental ownership. They want to buy a business they can be proud of.
- Get your brand in shape – Eliminate all brand confusion. Does all of your advertising match your business? Is your social footprint in line with your advertising? Does your business presentation match your social and advertising? Do your employees match your brand? Is it clear in all forms of media what you do and how you get paid? If there are any conflicts, resolve them.
- Figure out what you want to do next – A possible buyer will ask within a few minutes “Why are you selling?” You need an answer. One of the buyer’s biggest fears is that they are buying a time bomb set to detonate soon after closing. Why are you selling such a perfect business? You also need to ask that question for yourself. Really, why are you selling your business? If you don’t have an answer it may not be time to sell. Your business has been part of you for an extended amount of time. You need to examine your motives and have a plan for next.
- Hire a reputable business broker – I would recommend Vantage Business Brokers. A qualified broker will save you a lot of time, energy, frustration and money. Do you have time to run your business while you are trying to sell it? Do you know what your business is really worth, and can you document it? Are you prepared to negotiate the terms of the deal including transition plans and non-compete agreements? Do you have a database of buyers currently looking for businesses or track record of closing transactions?
If you can follow these 7 steps you will be able to sell your business in the shortest amount of time for the highest sales price. If you have any questions, Contact Us.
Call Steve Ahearn at Vantage Business Brokers, 206-650-0393.