Business and Finance

Steps to Take Before Selling Your Business

Deciding when’s the best time to put your small business up for sale takes careful thought. You spent years as a small business owner building your business from the ground up, and naturally, you want to get the maximum value. Getting ready for the sale of your business takes careful consideration and planning.

You may need to hire a broker, accountant, or attorney to help you navigate the complexity of the sale process. The amount you profit from the sale of your business depends on the timing of the sale, the strength of operations, and its structure. Business sales are time-intensive and you’ll need to have a plan on how to handle the profit of your business.

Understand how to price your business.


It’s important to understand the concept of business valuation. There are many ways to evaluate a business and many factors are taken into account. The valuation of all business-owned assets, the future earnings or profit, and intangible assets such as intellectual property and goodwill generated all factor into business worth.

You should understand how similar businesses are valued for sale. The best way to determine the value of your business is to speak to a business broker or appraiser who can help you understand what prospective buyers are interested in.

Make sure you know the selling process.


There are several important steps you’ll go through during the sale of your business. It’s in your best interest to appoint an advisor to represent you to buyers. You’ll need to analyze your business and find points of value. Gather up all of your financial statements, tax returns, balance sheets and loss statements, and other financials that show the growth history and potential of the business. Perform due diligence and ensure nothing is damaging about your business that could deter interested buyers.

Your advisor or broker can approach potential buyers, but you should meet with serious buyers. Ideally, you’ll field multiple offers and be in a negotiating position to earn as much money as possible. There will be some paperwork to sign upon the completion of the sale of your business, but this is usually handled by the lawyers you appoint. Depending on the size and type of business, it can take months or years to sell a business. You should also prepare for the possibility of going through more than one deal.

PCE Companies offers helpful advice on how to sell your business for the best offer. Hiring the right professional advisors takes the hard work off of you. An investment banker oversees the M&A process, prepares a preliminary valuation, markets your business, negotiates the purchase agreement, oversees due diligence, and negotiates the definitive agreements.

An experienced M&A attorney will be able to negotiate key deal points and a purchase agreement that provides protections to you the seller. An account will necessary to conduct a quality of earnings review for you before a prospective buyer does. This will ensure your business earnings conforms with Generally Accepted Accounting Practices (GAAP).

Hire a reputable advisor to help with the selling process.


It’s in your best interest to hire a professional team that can help you through the sale process. Working with the right team members ensures you don’t make any rookie mistakes. It’s a good idea to work with experts in mergers and acquisitions who can help you find qualified buyers. These experts understand how to sell your type of business and have a list of connections they can approach for you. They will anonymously represent your business on the market to ensure the competition doesn’t know you are looking for an exit strategy.

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Keep these steps in mind as you prepare to sell your business. It’s a time-consuming process and it’s important to get the most value for all your years of hard work.

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