When the time comes to sell your business, most business owners have not been advised about or planned on an exit strategy.
I urge anyone thinking about selling their business to plan ahead to help minimize unknown hurdles that always pop up when working with a ready, willing and able buyer.
Buyers spend a lot of time working with Business Brokers looking for the right business.
When they find it, they want to negotiate a price and contingencies of the sale and move directly into the due diligence process.
That process in and of itself is complicated, time consuming and extremely emotional for both buyer and seller.
The last thing you need is to add to the complication by not being prepared, which potentially cause a qualified buyer to walk.
A typical small to mid-sized, privately held business usually take 6-9 months to close and a good Business Broker will be able to help owners get prepared for that day.
There are many benefits of owning a business.
Many entrepreneurs have enjoyed those benefits for years or several generations.
However, when it's time to sell, the things that benefited you while running the business could cause issues when trying to sell it.
A business is valued on its income and assets.
All of which must be justifiable to a buyer if you are to maximize the sales price of your business.
Be completely open and honest with your Business Broker about all aspects of your business so they can best support your efforts in selling the business for maximum price without any last minute surprises.
If the income cannot be properly shown to a buyer and/or expenses that may not be related directly to the business can't be proven as "add backs", you run the risk of undervaluing the selling price.
Another important thing to consider is tax implications on the sale of your business.
Depending on the type of business (i.
e.
Sole Proprietorship, S or C Corporation, Limited Liability Corporation, Partnership, etc), there could be different tax implications that you must be prepared for prior to closing.
Seek professional advice from your accountant and/or tax attorney prior to selling your business to avoid any last minute surprises.
Remember, once you sign an agreement with a buyer to sell your business, it could be too late to change your mind without penalty.
Lastly, prior to selling your business, a good financial planner should be consulted to maximize your return of the proceeds and plan properly for retirement.
Take your time and meet with several reputable Business Broker in confidence to discuss the potential sale of your business.
They will be able to point out the potential hurdles you need to address prior to selling your business.
A good Business Broker is invaluable in the sale of your business and are not paid a dime until they sell it, so don't hesitate to contact them for a free valuation.
Many also have working relationships with legal, accounting, tax and financial planning professionals to whom they may refer you.
Every business owner deserves the right to enjoy a good return of their investment and all the hard work they put into building their business.
Honesty and full disclosure will go miles to help facilitate a smooth transaction between the buyer and seller.