Are you ready to sell your business but need some help to figure out how to do it?
Selling your business can be a difficult and lengthy process. You’ll need to think about things such as finding the right broker and timing your sale to maximize profit. You also need to be organized and have the right documents in place to show to potential buyers.
If you want to make the selling process of your business as easy and pain-free as it can possibly be, read on and we’ll tell you what to do.
Create an Exit Strategy
There are many ways to create an exit strategy. In order to create one, you should get clear about several important things.
You should know what type of business you have, and what its structure is. You should also decide whether you want to work with a broker or if you want to go it alone. Lastly, it’s a good idea to know what kind of person you want to take control of your business.
Types of Businesses
Depending on what kind of business you own, you might have to navigate various regulations when you’re selling it. Since these regulations differ between locations, this can get confusing.
If you need help to find clarity around these regulations, it’s a good idea to check with The Small Business Administration. This is a great resource for finding clarity on these kinds of matters.
If you own a franchise, it’s important to know that there are various kinds of regulations that requirements need to meet in order to sell their businesses. This is why you should set up a meeting with your franchiser in order to know exactly what you need to do.
The Structure of Your Business
Chances are that you started your business with one of the following structures: as a sole proprietorship, an LLC, as a partnership, or as a corporation.
Depending on how a business is structured, there are different kinds of processes involved in selling a business. If you have an LLC or a corporation, the selling process is more straightforward. The reason for this is that the law treats them as separate entities from the person who owns them.
If you have a sole proprietorship, the process is more complex. This is because this business structure is supposed to have a single owner. The income and liabilities are therefore linked to that person.
If you have a sole proprietorship, you can sell your business assets, but the new owner needs to put the business under their own name. Another easy strategy would be to change your business into an LLC before you sell it.
Choosing to Use a Broker or to Sell Privately
If you want to sell your business in the easiest possible way, there are many benefits to hiring a broker. Since they’ve been through the process many times, they know what it takes to sell your business with ease.
They will help you to do things like getting the right financial statements, knowing the right asking price, and finding the perfect buyers.
Keep in mind that brokers will usually charge a percentage with an overall commission that will vary depending on how large your business is. The minimum commission is usually around ten thousand dollars. This is why, if you have a smaller business, it might be better to sell it on your own.
You can make more money in the sale of your business if you don’t use a broker, but you need to know how to do it. You’ll also need to be well-organized.
Before you start the process of selling your business on your own, you should have a good idea about how much money it will cost and the time it will take.
Knowing Who Will Control Your Business After You Sell It
There are various types of people to whom you can sell your business, including an employee, a competitor who buys you out, and selling to somebody who is related to you.
Since the selling process is different for each of these scenarios, you should be clear about who you want to sell to before you move forward.
Prepare Your Company’s Financial Statements
If you want to show how much your business is worth to potential buyers, you need to show them proof of its revenue, cash flow, and profits. Since estimating the value of businesses is so important, it’s important to have the right documents in order to show to your potential buyers.
This is why it’s so important to have the right business records saved somewhere for when you’re ready to sell it.
Before you connect with potential buyers, you should have several things on hand such as tax records from the last seven years, business licenses, proof of ownership, and documentation of all liabilities.
Get a Business Valuation
It’s hard to be unbiased about your business when you’re selling it. This is why you should hire an independent company to offer an assessment of how much your business is worth.
Try to Increase the Value of Your Business Before You Sell It
There are various easy things you can do to make sure your business has the highest possible value. Do your best to tie up any loose ends and to tidy things up. You should also try to improve your profit margins while also paying close attention to what the market is doing.
The Selling Process Doesn’t Need to Be Difficult
When you’re in the early stages of the selling process for your business, it’s easy to feel overwhelmed. The good news is that there are various things you can do in order to make the process easier. For starters, consider hiring a broker and make sure that you have the right documents in order.
If you’re looking for the highest-quality support for selling your business in North Carolina, then don’t hesitate to reach out to us. We’re here to help with anything that you might need.