If you are thinking about selling your business, it’s usually because you’ve been doing so well that it’s clear you’ll be able to reap the rewards of your hard work and are looking forward to retirement or investing in a new enterprise. Before you place a listing in all the trade magazines and websites, it’s time to do some serious reality checks and make sure you won’t be surprised when the offers start rolling in.
How much is your business worth on the current market?
While business is booming, the perceived value of the company can easily get inflated by a hard-working owner. However, small businesses are more susceptible to charges in the market and your niche storefront may not find an eager buyer for your dream price. It’s best to contact a business appraiser to conduct a full audit and provide an objective view of a good asking price. You’ll enter the bidding wars with your eyes wide open.
You might need to offer financing to the buyer
Seller-provided financing is the most common form of financing for small businesses. Your potential purchaser may walk in the door asking what your terms of finance are instead of offering a pre-approved business loan form from their bank. That means you’ll want to do your due diligence with a background checks and perhaps the requirement of significant collateral before giving up your business to this unknown stranger.
Who is going to want to buy my business?
Unless you are actively involved in local chamber of commerce groups, finding a neighbor who wants to take over your small business can be the hardest part of selling. Placing a sign in the window and holding an open house one Sunday a month simply isn’t going to work. You’re going to want to cast your net as wide as possible, working with national business groups and attending trade shows. You can also hire a broker who will have the contacts needed to hunt down a potential customer as soon as possible.
It’s going to take some time
Unlike homes and apartments that can trade hands in just a couple months, it is common for the sale of a business to take more than a year to be finalized. If you’re in a hurry to raise funds, selling your store front is not likely to help you out anytime soon.
In the long run, contacting an attorney well versed in local business is an excellent place to start for assistance in creating an exit plan that includes the sale of your company. They can make sure your sales contracts are complete and binding and that you have the ability to enjoy the rewards of your labor.