Things To Do Before Selling Your Business

Has the time come to sell your business? There are many different reasons why you may have decided to move onto the next stage in your life. Perhaps you have decided to retire? Maybe you want to put your passion and effort into a new venture? Maybe you need to sell for financial reasons? No matter what applies, you need to approach the sale process with care and consideration. You need to make sure that the deal is right for you and that your business is left in good hands. With that being said, read on to discover the different things you need to do before selling your business.
You need to have proven revenue streams – First and foremost, it is vital to stress that buyers are not going to pay any more for potential. You need to have proven revenue streams. A lot of company owners believe they have a potential gold mine, and so they expect to command a huge selling price due to the perceived potential alone. However, this is not how it works. It is all about having proven revenue streams in place.
Prepare to leave your position – When you are preparing to sell your company, you need to understand whether the acquirer is buying your business, you or both. If the former applies, you need to begin the process of removing yourself from all of the critical roles.
Get your finances order – You should not attempt to sell your business until you have got your finances in order. A potential buyer is going to dig deep into the monetary side of your company, so you need to make sure that you provide accurate financial projections. You need to supply pro forma statements, both at a detailed and summary level.
Show viability, future sustainability, and recent performance – It is also important to make sure that you show the buyer that your business showcases future viability and sustainability. A lot of business owners focus too much on the past, but it is about the future. Yes, past performances can impress, but business owners want to know what they have something profitable going forward.
Get your business valued – Last but not least, it is important to get your business valued. There are a number of different approaches for different businesses. You can take a look at the IFA independent valuation models as a prime example. You need to choose a business model that is right for the size and nature of your company. One of the biggest mistakes that company owners make is valuing their business too high because they are too close to it. This is why an independent valuation is a must.
So there you have it: a number of different things that you need to do before you sell your business. If you follow the steps that have been presented above, you can make sure your business is ready for sale and that you can secure the maximum profit that is available to you.