Selling a business when you’re an entrepreneur is likely going to be an experience filled with mixed emotions. You may be excited to pass your company on to someone with the time and resources to take it to the next level. Perhaps you’ll experience twinges of sadness, after all your business was your baby that you created from the ground up. Some of us will even feel massive relief when we finally sell our business. No matter how you’re feeling, there are a few things you can do to make the sale of your business go more smoothly and to ensure you get the best possible price. Use these tips to get #SellSavvy but if you feel you need more help, consider enlisting the help of an advisor from BCMS.
Get Clear About What You Are Selling
What assets, tools, information and trademarks will you be offering in the sale of your business? If you’re an online entrepreneur and selling your online company, then you will need to figure out exactly what things are for offer in your sale. Sit down sometime and make a clear list. It’s a good idea to get a second opinion from someone else who knows your company well, to make sure you’re not forgetting anything and to make the process more seamless from the beginning.
Figure Out a Realistic Market Rate
Often businesses we’ve made ourselves have many emotional ties for us. We’ve nurtured the business for months, or years, and thinking about a price can be challenging. It can be a good idea to browse online for other similar companies for sale to see what kind of price you can expect. A good rule of thumb is that around 3 to 6 years worth of the annual income is probably a good starting price. At the end of the day, the realistic market rate is whatever anyone is prepared to pay for your business.
Pick Your Timing
Don’t sell your business when you’re exhausted from running it and things have started to become stale. It’s important to sell your business when things are going well so you can attract buyers who will be quite simply prepared to pay more for it. You may want to sell your business for a host of reasons, such as wanting to have more free time to pursue other opportunities or even so you can retire. Whatever the reason, make sure it’s a positive reason and that you have ample time to wait for the right buyer. Being hasty when trying to sell a business can provide extra leverage for the new owner, preventing you from getting the best sale price possible.
Have you recently sold a business before? Please let us know anything you learned along the way in the comments below.