5 steps to selling your small business for maximum value

By Marla DiCarlo

After starting a small business, you will eventually find yourself ready to sell. Perhaps you want to move on to a larger venture, have plans to enter another industry or it’s time to retire. Whatever the case may be, you want to make the most with the sale of your small business. Obtaining the maximum value can be tricky. If you know the right steps to follow, you can ensure that you receive the best price for your business.

Follow the steps below to get off on the right foot with the sale of your business.

Take your time

If you have decided to sell your business, take your time. To obtain maximum value, you will need to prepare your business effectively. This will include organizing paperwork, increasing sales and ensuring that you find the right qualified buyer. Taking your time will help you to not rush the sale, missing out on a potential increase in the sale price. Typically, a business should expect to take one to two years to sell.

Valuation

Once you have decided to sell your business, you need to have it evaluated. A valuation will allow you to set the right sale price. Hire a third-party valuation firm to determine the true value of your business. With the professional valuation, you will have credentials to back up the purchase price you set. Any potential buyers will be able to review the valuation and see that the sale price you have set is credible.

Organize financial information

Potential buyers want to see documents that reveal the viability of your business. Buyers want to see that a business can be successful long term as well as review the profits of the company. Buyers will want to factor in every aspect before negotiating a deal. This will include reviewing real estate, business financials, equipment, assets, etc.

By having this information presented in a packaged format, the buyer will feel more comfortable with negotiating a deal. They will have all the data they need in one place, which is beneficial to securing the maximum sale price for your business.

Increase sales

To potential buyers, companies that have a healthy income structure and several sources of revenues are attractive. Improving the overall performance of the business, you will be able to maximize the profits that help to increase the value of the company. If you choose to sell a business when sales are in decline, the profits and value will be diminished.

If you are able to increase sales, it will help to push your business to the top dollar. Work within the time frame of preparing the business to increase sales and profits. This will help to increase the value of your business. Secure new contract deals or find other ways to push sales so the business is operating positively to provide maximum value during the sale.

Hire a third-party broker

A business broker is the best guide to help you achieve the maximum value for your business. A third-party broker will help you in several ways. First, they will be able to provide a valuation for your small business. The broker can provide marketing for potential buyers as well as locating individuals who will be interested in your business. Potential buyers can be qualified via the broker with funding secured for the individual via resources available.

Use these five tips to help sell your business for maximum value. With an organized plan, you will be ready to receive the best value for your company.

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Marla DiCarlo is an accomplished business consultant with more than 28 years of professional accounting experience. As co-owner and CEO of Raincatcher, she helps business owners get their business ready to sell so they find the best buyer and get paid the maximum value for their business.

1 comment

  1. Ellie Davis says:

    I liked that you mentioned taking your time while selling your business will help you not to rush your sale and probably increase the sale price. My father is thinking about selling his 10 years old business, and we are looking for advice. I will let him know about the benefits of taking his time while selling it to get the best out of it.

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