Do you want to learn how to sell your business successfully? Allow me to share some tips so that you can have a successful exit.
I’ve sold hundreds of online businesses: my own as well as as a broker for others.
There are many steps involved in selling a business successfully but if you follow the right steps and plan thoroughly, you can maximize the profits from selling your business.
In this article, I will cover the steps you need to take to ensure you sell your business the right way.
How To Sell Your Business And Have A Successful Exit
So you’ve decided to sell your business, congratulations.
Selling your business can be exciting and overwhelming at the same time.
So how do you do it? How do you ensure you sell your business for the best price possible?
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Preparing to Sell Your Business
Selling your business is a major decision, and it’s not something to be taken lightly, so before you sell your business, you need to prepare for it.
First, you need to understand the value of your business and analyze its financials before you decide how you intend to go about the sale.
You need to know your numbers inside out.
To be honest, this is one of the most important steps in selling your business.
You need to know your revenue, expenses, and profit because a potential buyer will certainly want to know these, and putting your financials in order will help you get the best value from the sale.
Take a thorough look at your balance sheet to see the main sources of revenue and cost.
Apart from helping you put your best leg forward when relating with potential buyers, looking at your balance sheet will provide insights into areas where you can reduce costs.
Doing this will increase profits for your company, a total win-win for you and any potential buyer.
Other factors to consider
You need to consider other factors to understand better what your business is worth.
- Your customer base
- Your customer size
- Your business vs your competitors
- Profit and loss
- What assets are you selling with your business
- Brand recognition
- Do you have any patents or trademarks?
- If yes, do you have products sold under those patents and trademarks
- What are the tax implications or liabilities that come with selling your business?
Considering all these will give you a full picture of what your business is worth.
As you can see, to maximize your business’s value and ensure a successful sale, you need to put a lot of work into the preparation stage.
Analyze your cash flow, revenue, cost, and profits because a potential buyer will want to know.
In fact, it’s one of the first things they will ask for.
Finding Buyers for Your Business
The next step is finding potential buyers for your business, and my advice is; to use a broker.
You need to find a broker to manage your business’s sale.
Why use a broker you ask?
Any sale transaction comes with moving parts that you likely don’t want to deal with, or don’t know how to deal with. You also don’t want to be taken advantage of by a seller.
A broker offers you guidance throughout the entire process.
And, a broker will help you manage the tricky parts of selling a business.
They will also advise you if any portion of the sale becomes complicated.
Another benefit of using a broker is a broker can give you a realistic idea of the best price to sell your business plus, a good broker will help you market your business so you can get the right buyers.
What’s not to love?
There are a few platforms where you can find buyers for your business.
First is the Niche Investors platform. This platform is my fave for so many reasons.
When you sell your business with Niche Investor, you’ll get the services of a seasoned broker to guide you through the process.
The niche investor team is great at managing the sale process and connecting you to the right buyer to have a seamless sale.
This is where all your preparation and hard work pays off.
At this stage, you get to negotiate a price that is good for you and the potential buyer based on the value of your business.
Always remember that you don’t have to accept the first offer made on your business.
You can counteroffer or reject the offer.
You need to leave the sale feeling like you got a fair deal for yourself and the buyer.
Put everything in writing
Ok, so you’ve found a buyer and agreed on a fair price; the next step is to get everything in writing.
The terms of the sale need to be clear to both parties.
Include details like the sale price, the assets included in the sale, etc.
Taking the time to agree on the terms and put everything in writing is so important to avoid any misunderstandings in the future.
This is another reason to consider selling your business on the Niche Investor platform. They manage the fine print and contracts for you.
The team provides an agreement for you and the buyer which takes this process off your back.
Closing the Sale of Your Business
Congratulations are in order at this point.
You’ve gotten past the complex parts of selling your business: getting your business ready, finding a buyer, and negotiating like a boss.
Now it’s time to sign the agreement, transfer the assets, and get paid.
Remember, an experienced broker is key to helping you get through the complexities of selling your business.
After Selling Your Business
So what next?
Here are a few things you need to do after selling your business.
- Transfer licenses and permits to the new owner
- Notify your employees if any
- You could also send your suppliers and customers the information of the new owner
- If you have any contracts, leases or services in your name, you’ll need to cancel those as well.
Selling a business is a big achievement, and you need to plan for and take the necessary steps to ensure its a successful transaction.
You’ve got this.
If you’d like to work with me and allow me to connect you with buyers, tell me a bit about your business and we will chat.
FAQs: Frequently Asked Questions About Knowing How To Sell Your Business
What are the steps in selling a business?
Prepare your business for sale – Compile financial records, including income statements, balance sheets, cash flow reports and tax filings etc
Decide on a price to sell your business ( consult the services of a broker)
Find buyers for your business
Negotiate and agree on a fair price
Put everything in writing – finalize the paperwork
Close the sale and transfer assets
What is the easiest way to sell my business?
The easiest way to sell your business is by using an experienced broker’s services, like the Niche Investor platform.
Before you do this, you must ensure your business is ready to be sold.
Put together the required paperwork, ensure your financials are in order, understand your business’s value, and assemble a list of the assets that will be transferred during the sale .
Doing these will help ensure you get the best price possible for your business.
How do you determine what to sell your business for?
So you’ve decided to sell your business, but how do you decide what to sell your business for?
Well, an industry-standard valuation multiple is 24-36x the business’s monthly profit. So a business that earns $10,000 could potentially sell for $360,000.
Your broker will be able to give you a valuation once they have looked at all factors and compared your business to the market.
Here are a few factors to consider:
– Do some research on what similar business in your field is selling for.
– Another factor to consider is how much your business is making; the higher your revenue, the higher you can sell your business.
– How soon do you want your business sold? Do you want to sell it to the first available buyer or are you willing to wait a little longer for a higher price?
– What is your business bringing to the table?
– Do you have inventory that you’ll be transferring to the new owner? What assets are included in the sale? All these are questions you must ask yourself before deciding on a price.
– Use the services of a professional broker. This will make your life a lot easier.
When is the Right Time to Sell Your Business?
Selling your business is a big decision, and you may be wondering when is the right time to take the leap, I get it.
Here are a few things to consider to help you with your decision:
– Why do you want to sell your business in the first place? Do you want to start a new project? Retire? or are you burnt out?
– What is the current demand for your services, and what are the market trends? Is it getting better or declining?
– Evaluate what your business is worth and how much you will make to sell your business.
How To Sell Your Business And Have A Successful Exit – Conclusion
Now that you know how to sell your business, you are one step closer to your profitable exit.
Take some time to consider these factors, and you’ll be able to make the right decision about your business.
Selling your business is a big step, but with these tips, you’ll be on the right part to making the best decision.
Are you considering selling your business? Let me know in the comments below.
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