SELL A BUSINESS

Ultimate Business Selling Guide

If you are thinking about selling your small or large business, it’s important to think about how to prepare your business to be sold for the most amount of money. As well as how to attract the right buyer at the right price.

Considerations For Selling A Small Business

Selling a small business, depending on the business, can be quick and simple or it can be a rather complex venture that may require that you use the services of a business broker, an accountant, and maybe even an attorney to complete the transaction. How much profit you can make from selling your business will depend on when you sell the business, why you are selling the business, how strong the business sales are, and even the structure of the business. Selling your business will also require you to devote some time in gathering the information that your business boker commercial real estate agent will need in order to attract the right buyers, and to speak to those buyers intelligently about your business.

Preparing To Sell Your Small Business

When you begin to prepare to sell your business there is some homework for you to start working on. You will want to think about exactly why you want to sell your business, and how best to explain that to any potential buyers interested in buying your business. You will also want to work on getting your business into the shape that it needs to be in for a buyer to be able to understand your business, and want to buy your business. You will also want to look into what time of year is the best time to sell your type of business.

8 Steps To Sell Your Small Business

These eight steps will help you develop a good plan for selling your business as quickly as possible, and get the best price for your business to make the most profit from the sale.

1. Reason You Are Selling Your Business

Something has made you decide to sell your business. Every potential buyer will have this question at the top of their list of questions that they will want you our your business broker to answer. Why do you want to sell your business?

Some of the more common reasons to sell a business are:

• Retirement • Death or Illness • Problems Between Business Partners • Tired or Overworked • Loss of Interest • Not Profitable (this will lower the worth of the business) • Moving Out of the Area • Conflict of Interest • Wanting To Invest In A New Business

2. Timing of the Sale

You will want to start preparing for the sale of your business as soon as possible once you have made the decision to sell. The longer that you have to prepare your business, the more successful you will be in attracting the right buyer for a good price. This gives you time to start getting your financial records together, and up to date, and ready for a potential buyer to take a look at. This will also give you an opportunity to document and improve your business structure and customer base in order to make your business more profitable. This more of this type of preparation that you do, the easier it will be to sell your business, and the easier it will be for the new owner to run the business on their own.

3. Business Valuation

Now you will want to figure out the important part, what is your business worth. How much can you sell your business for. You don’t want to sell your business at too low or too high of a price. You want to make sure you get what it is worth, so you can make the most profit from selling your business. If the price is too high, it will be hard to sell. If the price is too low, you are losing money out of your own pocket. A business broker can run some comparisons, and help you value your business. You can also consult with a business appraiser to get a detailed document of the worth of your business. Having documentation from your business broker, or a business appraiser, will help bring credibility to your asking price for any potential buyer.

Some of the ways to increase the value of your business:

• Increase Profits • Having Consistent Verifiable Income • Building A Strong Customer Base • Having Large Multi-Year Contracts

4. Should You Use a Business Broker?

The short answer is yes! It is always a good idea to have professional assistance from an expert in the field in anything you do. It gives you access to a larger pool of buyers, and buyer agents. It will give your business for sale listing more exposure. A business broker does this for a living, so they know how to answer questions from buyers so that it can speed up the process of selling your business. They also will have advice on how to prepare your documents, what documents you will need to get prepared, and more. It also gives you someone to field all of the calls, emails, and texts that come with having a business for sale. This will free up more of your time so that you can continue to run your business, and prepare for the sale of your business. A Business Broker typically charges ten percent commission for successfully selling your business. The cost is worth it to get the peace of mind in knowing the sale will be handled correctly, and to get a higher chance at successfully selling your business. It is also worth the price so that you don’t have to deal with all the fake buyers out there looking to steal information, and the window shoppers that aren’t really looking to buy but instead wishing they could. You may want to adjust the sales price to incorporate this extra cost, if the value is there in the business to justify the price.

Sell Your Business with A Business Broker

Michelle Mendenhall Professional Business Broker, IBBA Commercial Real Estate Sales & Leasing Associate Phone: 916.459.7526 DRE #02116152 LocalGirlGoesCommercial.com michelle.mendenhall@localgirlgoescommercial.com michelle.mendenhall@expcommercial.com

5. Preparing Documents To Sell Your Business

Now comes the less fun part. You will need to start gathering your documents that will be needed to be presented to any potential buyer. For some documents you may want to have any potential buyer sign a non-disclosure agreement (NDA). Some documents you may only want a potential buyer to see only after they have submitted, and you have accepted, and offer to buy your business. This is during the due diligence period. All of this will better protect you from any potential intellectual property being divulged to just anyone.

Types of Documents to Gather And Make Copies Of:

• Financial Statements Tax Returns For The Last Three To Five Years • Document List Of Equipment Or Assets Included In The Sale • Document List Of Contacts Related To Sales, Transactions, And Supplies • Lease Agreements • Title For Any Included Vehicles • Document A Summary To Describe How The Business Is Conducted

6. Finding The Right Buyer For Your Business

Selling your business may take a few months, and in some instance it may take a year or more depenging on the market conditions for buying a business. Sometimes finding the right buyer for your business can be a challenge. This is where it helps to get in touch with a business broker that will give your business for sale listing more exposure to a larger network of potential buyers.

7. Potential Buyers Ready To Buy Your Business

Now that you have a buyer, don’t stop there. You should continue trying to sell your business until your business is sold. It’s good to have two or three potential buyers ready to make an offer which could increase the sales price. It will also give you a better chance of getting another offer immediately if the first deal falls through.

Types of Documents You May Encounter During The Sale:

• Bill of Sale - Transfers The Business And Assets To The Buyer • Assignment Of A Lease - You May Need To Help With Landlord Discussions • Security Agreement - If Seller Retains A Lien On The Business • Non-Compete Agreement - Buyer May Ask You To Sign This

8. You Sold Your Small Business - Now What?

Now you can breathe easy and relax. You should take some time to enjoy your new free time that you never knew you were missing. You may want to invest your profits into buying another business, or into some income producing assets.

Some Investment Opportunities:

Buy Another Business Buy An Online Business Build A Website Business Monetize Your Website Buy Income Producing Assets Invest In Or Make Your Own NFTs Invest In A Revenue Share Business Opportunity One of the most exciting opportunities to invest in is a revenue sharing business opportunity. With this type of investment, you do not have to do any of the day to day work of the business, and instead you are investing in the revenue of the business. If you pick the right revenue sharing business opportunities you can sit back and earn profits on your investment. A great way to spend your early retirement, freeing up your time to enjoy your retirement.

How to Sell a Business FAQs

How Do You Sell a Small Business With A Business Broker?

A business broker is easy to find and work with. A quick phone call, email, or text will get the conversation started. They will walk you through the process. They will talk to you about your business, and let you know what documents and other information that they will need. You will sign a contract with the commercial real estate agent business broker, and then they will get your listing ready to publish and shared with potential buyers. Get started with a business broker today.

What Are the Steps for Valuing A Small Business?

Your business broker will research other listings that are similar to your business. They will go over your profits, and your financial documents, assets, and other relevant information, to help come up with what you should list your business for sale for. Other things that can impact the business value are the number of years in business, market and customer base growth, and multi-year contract values.

How Much Does It Cost to Sell a Business?

A business broker will typically charge you ten to fifteen percent of the sales price as a commission on a successful sale. You may encounter other fees such as attorney’s fees, accountant fees, costs for getting the business ready to sell such as improvements and repairs. There may be fees associated with the lease for the new owner, but those would typically be paid by the new owner, unless a change is required before the transaction closes escrow.

How Do You Sell a Business Quickly?

The quickest way to sell your business is by having all of your documents in order, and engaging with a business broker. Tell them the urgency in selling quickly, and they will do everything they can to speed up the process for you. Transactions take time, so it won’t be an immediate sale and transfer, but you can have a quick close of escrow and negotiate a short due diligence period, if the buyer will agree to these terms of the sale.

How Do You Sell a Franchise Business?

When you are looking to sell a business franchise, you will need to work in conjunction with your business broker and your franchiser. The franchiser will probably need to determine if the buyer is appropriate to be a franchise owner, and the business buyer will need to sign a franchise agreement with the franchiser. There may be fees and rules associated with owning or selling a franchise that can be found in the FTC’s compliance guide.

How Do You Sell Your Share of a Business?

If you are looking to share a share of a business that you have with other business partners, there is typically a common ownership transfer method, especially for small business. Working with your partners to have an agreement in place with your business partners ahead of the sale will help to ensure a smooth business transition to the new owner. This will also help to ensure that the existing partners and the new business share owner will all benefit from the transaction and continue to have a successful and profitable parntership together.

The Bottom Line About Selling A Business

Selling a business is a time consuming task, and it can also be an emotional time. If you have worked long hours, for a lot of years, building up your business into a successful and profitable business, it can be hard to let it go. With your hard work and preparation ahead of time, and picking the right buyer, you will ensure that your business will have a smooth transition to it’s new owners. If you pick the right buyer, you will be able to ensure it is going into some good hands as well. At ViralStudioX, we highlight products and services that you might find interesting. We frequently receive free products from manufacturers to test. This does not drive our decision as to whether or not a product is featured or recommended. If you click a link on this page, then go on to make a purchase, we might receive a commission – at no extra cost to you, and does not impact the purchase price of any products that you may purchase.