Are you an entrepreneur and plan to sell your business? Check this out
I've just read this at entrepreneur.com and I immediately found it useful for those entrepreneurs who might be thinking about selling their businesses. Here's a part of the story:
Plan Ahead
Like they do for any big purchase, business buyers will do their research before signing on the dotted line. That means it's important for sellers to be ready to demonstrate their business is worth the asking price. Make sure your financial records are in order. Keep a minimum of three years of documents, including tax returns and expense records. These are essential to establish buyer trust in the economic history of the business. Also, be sure to resolve any outstanding business issues. These can include short-term lease agreements, over-reliance on one or a few key customers and any outstanding legal issues.
Like they do for any big purchase, business buyers will do their research before signing on the dotted line. That means it's important for sellers to be ready to demonstrate their business is worth the asking price. Make sure your financial records are in order. Keep a minimum of three years of documents, including tax returns and expense records. These are essential to establish buyer trust in the economic history of the business. Also, be sure to resolve any outstanding business issues. These can include short-term lease agreements, over-reliance on one or a few key customers and any outstanding legal issues.
Don't forget the physical elements of the business as well. Take care of any building improvements such as painting the storefront, cleaning up the distribution facility or re-decorating the interior. The physical appearance is often the first impression a buyer gets, so make sure it's a positive one.
Understand the Market
To set your asking price accurately, you need to know where your business stands in the market compared to other businesses for sale. Overestimating your value can lead to a long and difficult sale process, while underestimating will leave money on the table. Expect an improved selling environment in 2011, but don't make the mistake of asking for pre-recessionary prices.
To set your asking price accurately, you need to know where your business stands in the market compared to other businesses for sale. Overestimating your value can lead to a long and difficult sale process, while underestimating will leave money on the table. Expect an improved selling environment in 2011, but don't make the mistake of asking for pre-recessionary prices.
To determine the right price, find out what similar businesses have sold for or listed for recently. Websites like BizBuySell.com and BizQuest.com allow you to search for similar listings based on factors such as industry, size and location. You can also purchase a valuation report to see detailed information on recent local sales.
Take a look at your own financials as well. If your business' revenue and cash flow have declined, take that into consideration. Buyers will. Don't be fooled into thinking they'll pay you based on business results prior to the downturn. The goal is to set a price that will attract the greatest number of serious buyers and enable you to close a deal at the highest possible price.
Read the original full post here.
