Deciding to sell a business you have founded, nurtured, and grown can be agonizing — or liberating. Owners choose to sell their businesses for many reasons, from retirement to a hope that new management can turn a greater profit. Whatever your reason, it is important to consider these questions before you sell your business.
Consider the factors that make your business saleable — or not. Your profits history, current sales trends, location, and the condition of your premises and equipment all affect your business’s desirability. There are ways to make your business appear more profitable, such as lowering your own salary or removing perks that you’ve been getting, such as travel and expensive seminars. Then ask yourself: Is my business saleable for a reasonable price?
Think about these additional questions to make sure you’re ready to move onto the next step:
* What will I do next? (If it might in any way compete with your old business, don’t sign an overly restrictive noncompete agreement with the buyer when you sell.)
* Is this the best time to sell?
* Will I get enough money to justify all my hard work?
* Will I really be improving my financial or personal situation?
* Do I want to maintain a relationship with the business, perhaps as a part-time employee or consultant?
* Are there steps I can take to make the business more attractive to potential buyers?
Next, choose the best time to sell your business. This will be affected by business cycles, which wax and wane with the economy. Obviously, you’d like to sell your business when market demand is high. If your geographical area or business sector is experiencing a recession, you may want to wait until things improve. Other factors that can help you decide when to sell include the health of your business, market confidence, credit availability and industry trends.
Kelli Sadler is the proproprietor of BizAus and makes her living out of buying and selling businesses here on the Coffs Coast. If you are thinking about selling your business, now or in the future, it would be a good idea to sit down with Kelli for a free business sale appraisal. It will help you to start making the right decisions to maximise the value of your business.