The term ‘small business’ rarely manages to capture the amount of time and effort that went into building it up from the ground. While it might not be on quite the same scale as larger organisations, in many cases, getting the sale process just right will be even more important, especially if it’s your main asset. To make the process somewhat more graspable, we’ve compiled this brief guide on where to start when preparing for the sale – here’s what you need to know.
Establish your reason for selling
When selling any business — but perhaps particularly with smaller businesses — you need to be clear about why you’re selling the business. If you want to move forward to different ventures, and you just want to get some quick cash to set yourself up, your strategy will be very different compared to if you were focused on looking for a team to take the business forward with a similar ethical ethos to your own, regardless of how much money the buyer can pay for the business. Getting clear on your motivations early on is key to navigating the following steps.
Evaluation
Next, you’ll want to evaluate your business. How this is done depends on a range of different factors, from your sector to the different markets you operate in. It will likely include establishing how much your assets are worth, the extent of your debts, your annual income, and future predictions around growth.
Your evaluation will also likely provide you with insights into how you can make the business more attractive to potential buyers. Whether that’s highlighting potential opportunities for growth or getting your debts down, these preparations can often help you get a lot more for your small business.
Develop and execute a sales strategy
Next, you’re ready to start working on and eventually executing a sales strategy. While you technically can try to do this alone, in most cases it’s worth working together with a business broker such as Dexterity Partners.
Selling a business is a relatively complicated process, and you’ll need to gain an understanding of the regulatory frameworks that govern the process, along with any other legal implications such as taxation and due diligence. A business broker will also provide you with access to their professional network, which can make the difference between being able to find a buyer or not.
Tie up any loose ends
Lastly, you need to make sure that you tie up any remaining loose ends. For example, before you complete the sale, or even grant potential buyers access to your books, you need to make sure that all your documents are in order. This will be needed to ensure that your business passes the buyer’s due diligence, and to avoid potential legal complications further down the line.
Preparing your business for sale might seem a little daunting, but as with anything, with enough time and preparation, it should all go smoothly. Make sure that you work with the appropriate lawyers and accountants, and you should be able to navigate the inevitably rocky road with ease.
Conclusion
Selling your small business is a significant decision that involves careful planning and strategic execution. By establishing your reasons for selling, thoroughly evaluating your business, developing a comprehensive sales strategy, and tying up any loose ends, you can ensure a smoother and more successful sale process. Working with experienced professionals, such as business brokers, lawyers, and accountants, can provide invaluable support and guidance throughout the journey. With the right preparation and mindset, you can navigate the complexities of selling your business and move forward to your next venture with confidence.
