How to Sell and Close Your Small Business
The sale of a business is one of the more involved and complex processes a business owner can ever experience; in most cases, there is little margin for error. There can be many second chances to overcome mistakes in building a business; however, it is rare to get a second chance when selling a business. Although every business sale is unique, there are certain aspects of the process every business owner must get right to ensure a successful outcome. If you are ready to retire, the following information details how to sell and close your small business.
Develop an Exit Strategy
Without a clear exit strategy, it can be difficult to know if the sale process will produce your desired outcome. Before starting the process, set clear objectives that form the framework of your exit strategy. Your exit strategy is a formal statement of your personal, financial and business objectives that should include:
* A specific exit date;
* A strategy for maximizing the sale price of your business;
* A plan for ensuring your family's financial future;
* A process to determine whether the business should be transferred externally or internally;
* A description of the role you expect to play during and after the transfer.
Determine the Saleability of Your Business
In determining the saleability of your business, look at it through the lens of a buyer. Although each buyer may have his own criteria for evaluating a business, the most essential elements all buyers consider are profitability, solvency, market position, management, employees and customer base. Your goal should be to clearly assess each and work on turning any negatives into positives before you begin the sale process.
Determine the Value of Your Business
Valuing a business is much more complex than appraising a piece of real estate. In the business arena, an owner does not set the price, and neither does the market. It is the buyer who sets the price, which is why there is no simple formula or rule of thumb for valuing a business. Still, you should have a professional business valuation well before you plan to sell the business to provide you with ample time to fix the negatives and accentuate the positives to increase its value.Source: http://www.investopedia.com/articles/personal-finance/120915/ready-retire-heres-how-sell-and-close-your-small-business.asp#ixzz4esC6mXir