How challenging can selling a business be? On the surface, the prospect appears simple. First, you have a business and want to sell it, then you share that information and wait for a buyer. But the reality is both more complicated and more nuanced. Using a broker takes the pressure off you so you can focus on your business operations.
Few business owners understand everything involved in selling a business. Even fewer have the time in their busy schedules to manage the process. That's why working with a professional business advisor can help you sell your business with ease and confidence.
Have All Necessary Documents
To begin the process of selling your business, you need to gather all the appropriate documents for your advisor. You'll need to show the history and the potential growth of the company. Items to include are: tax returns, all leases and contracts, YTD financials, vendor and supplier information, current inventory, accounts receivable aging.
This information provides insight, allowing the advisor to create a potential buyer profile. It can also show the potential buyer their benefits.
Market Your Business
The next step is to determine how to best reach the right buyers for your business. There are many avenues a business advisor can use to successfully market a business for sale. This can range from using buyer lists or posting on digital platforms. Strategic research about other companies in the same industry will offer insight into the types of buyers you want to target; individual or expansion buyers who want to merge their businesses or acquire new ones.
Essential to the marketing process is only sharing information as needed for each stage of the process to potential buyers. The process begins with a 100% confidential advertisement to pique interest. Then targeted advertising efforts and outreach targeted toward buyer databases. Once a potential buyer expresses interest and signs an NDA, you can share a limited package of summary financials. The timing of the release of certain details is a successful strategy to keep the buyer intrigued.
Submit Your Paperwork
The final stage of due diligence involves releasing the last of the financial information once an offer letter of intent has been accepted by both parties. This is when you release full details like property information, bank statements, payroll reports, employee lists, job descriptions, and a full inventory. The bank will also order tax transcripts from the IRS directly.
Once you submit the paperwork and all parties sign off, you can celebrate the successful sale of your business and prepare for your next stage — whether it is a new challenge, retirement, or something else.
Business advisors can walk you through every step of the selling process. They can help you determine the market value of your business, assist you in gathering your assets and financial documents, find a buyer, work with the professionals such as wealth managers, accountants, attorneys, lenders, inspectors, and appraisers, and finish the sale. After all, you want the best price with the best terms for your years of hard work and effort.
Using an advisor and having all your paperwork in order can only help maximize the profit on your business sale.
Editor’s note: Ashley Kelsey is a Business Broker at Transworld Business Advisors of Eastern North Carolina.