If we are looking to sell a business, there are some steps that we need to take. Selling a business can be more complicated and involved than selling a typical real estate property. We need a set of skill and expertise to sell a business properly. To get a fair value and better overall success, we need the help of a business broker:
- List our business with a broker: It is important to work with a reputable broker who can inform us about all the necessary things related to the sales process. They can do many things to help us sell our business. This is also a good step to take if we want to sell our business confidentially. Look for professional intermediaries who can guide us throughout the process.
- Determine appropriate prices: Before we sell our business, it is important to define a proper asking price. This is another thing that the broker can help us. They may valuate our business, if our business is small enough. However, we need to hire a professional, licensed business evaluator who determines the proper selling price. We should know what we are selling, whether just the property and equipments, or also shares. There could be tax implications related to business sales. Accounts receivables and inventories should also be included in the asking price. Determining a selling price is essential when selling a business.
- Create business profile: With good business profile, potential buyers can get a snapshot of our business and it should become an effective “teaser” that encourages people to learn more about our business. Professional brokers should help us create a proper business profiles with templates that can be filled with our unique information. There should be short descriptions of our businesses, including the general financial performance.
- Marketing and advertising: In many cases, brokers will handle the advertising and marketing tasks, but we could also do it on our own, by referring to the broker’s webpage of our business. However, we could let the brokers do them for us to maintain the confidentiality of the sale.
- Determine qualified buyers: There could be more than a few potential buyers, if our business has good financial performance. At this point, we should screen a potential buyer, based on their “seriousness” aptitude for business, financial ability and others. The broker will ask the potential buyer to sign the non-disclosure agreement, before they are presented with more complete information, such as the detailed financial performance, number of employees, operations of the business and other pertinent information. The information provided is placed under strict non-disclosure guidelines to ensure sales confidentiality.
- Show the business to promising buyers: This is a significant step before we sell a business. By inviting potential buyers to see our business directly, they will be able to get a more accurate picture of our business. It’s the time to show off our business, so it is important to showcase it effectively and display all of our accomplishments. Buyers will know that we are being honest by showing our business directly. There will be many questions from them at this point, so we should answer them whenever we can.