As an entrepreneur, you're proud of the business you've built. You work tirelessly to see it thrive. But now, you're ready to sell your business. It takes a lot of time, energy, and effort to build a successful business. And, you deserve to have a selling experience that's smooth and profitable.
Selling a business can seem daunting if you don't have other experiences to compare it to, and that's okay. There's an army of experts out there who understand this process in and out.
You'll want to walk away from the sale with enough money to pay off lingering business debts and, ideally, have enough left over to reap the rewards of all your hard work. So, maybe you can start to plan that long-awaited luxury vacation after all (Yesss!).
Even though it might seem daunting now, selling your business is doable.
5 Steps to Sell a Small Business with Ease
Step 1: Ramp up Marketing and Sales
When you decide to sell your business, think about ways to bring in more sales. Ramping up sales now increases revenue, brings in new customers, and makes your business look stellar to a prospective buyer.
You could run promos, ads or offer a special referral discount to incentivize customers to spread the word about your business.
Step 2: Get Your Financials up to Date
Clean financial records aren't just good to have while you're in business. They're an absolute must-have when you're ready to sell. Your bookkeeping must be accurate, so you can confidently answer questions your broker, lawyer, and a prospective buyer all have.
Plan to meet with your bookkeeper to review your financial data, such as your Profit and Loss and Balance Sheet. Ask questions. You want to be comfortable with your numbers to answer any questions that come along with confidence.
Step 3: Get Your Team in Place
Build a support team of experts. Interview business brokers, lawyers, valuation experts, a CPA, and a bookkeeper.
Here's what each of those roles covers during the sale of a business:
Broker- Your broker assists in the purchase and sale of businesses. They're in charge of helping you secure a favorable price, get all that paperwork in order, and make sure licensing and permitting requirements are complete.
Lawyer- Your lawyer reviews legal documents for any loopholes that may put you at risk. They make sure your contract is rock-solid and that the sale is fair for all parties involved.
CPA- Your CPA makes sure your tax records match your financial records, so there's no discrepancy between the two. They also talk you through the tax implications of selling your business and make sure you know what to expect tax-wise down the line.
Bookkeeper- Your bookkeeper verifies all the transactions going in and out of your business, so your financial statements are correct and can hold up under the scrutiny of business brokers and prospective buyers. (Remember, your financials will be under a microscope during the process, so it's super important to make sure they're in tip-top shape.)
Valuation Specialist- Your valuation expert works with you to determine the economic value of your business. They provide you with a detailed report you can use to support the dollar amount you're asking for on the sale of your business.
Step 4: Get Paid in Full
If you're able, avoid long-term payment plans for the sale of your business. But, if you must go that route, consider increasing the deal's cost to compensate for the risk of getting paid over many years versus getting paid as a lump sum. The buyer could, at some point, disappear and stop paying you. If you accept a payment plan, work with your lawyer to build transparent and well-defined terms into your contract.
Step 5: Phone a Friend
Let's face it. The experience of selling a business is bittersweet. Thank goodness there's always the option to phone a friend.
Surround yourself with the people you trust the most, so they can listen when you need to air out stress or cheer you on when you sign on the dotted line!
The Bottom Line
Have people you can go to when you have questions, feel concerned, or need to chat about how things are going. Build your team up. You've done the hard work, and now, you get to enjoy the rewards.
Are you ready to sell your business and need help with your HR and payroll?
We're here for that too. No matter which stage of business you're in, we've got your back. Reach out to our expert support team and get the help you need today.
Many business owners have the same goal: To sell their business for a profit one day. Please share this article with them. It's never too early to get the pieces lined up for that future sale and long-awaited luxury vacation. Hawaii, here we come!