Trying to sell off a small business can be a complex task as it tends to involve several considerations. You may need to enlist an attorney, accountant, and broker to take the right steps. Also, you need to have knowledge of company shares and what needs to be done. Your business operation strength as well as its structure will depend upon reason and timing of the sale. Selling your business will also take a good amount of time and you need to find out smart ways to manage profits earned.
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Seven considerations to make to come up with a solid selling plan and dealing with company shares
- Reasons to sell your business: Why? This is a crucial question that will be asked by potential buyers. Few reasons can be boredom, becoming overworked, death or illness, partnership disputes, or retirement. Few attributes can help your business to appear lucrative for buyers like major contract spawning for several years, strong customer base, consistent income, and increasing profits.
- Sale timing: Early preparation for sale is recommended, perhaps a couple of years in advance. It will help improve customer base, business structure, and financial records, thus making your business appear more profitable.
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- Business valuation: Determine what your business worth is. It should not be exceedingly high or low. You can get a valuation from a reliable business appraiser. Document availed will provide creditability to your desired rate and also serve as a listing price. You also need to consider the company shares if there is one.
- Broker services: You can save a good amount of money on broker commission by selling off your business without any external assistance. This is possible if you manage to sell off to a current employee or reliable family member. But brokers can quicken your selling process and also ensure availing the highest price.
- Prepare documents: Tax returns & financial statements dating back to 3-4 years will be necessary. A qualified accountant should review it. Also, make a list of equipment & accessories to be sold off along with your business. Prepare contact list associated with supplies & sales transactions. Keep in hand paperwork like the current lease.
- Identify prospective buyers: You may need to seek professional assistance to find prospective buyers who can offer your desired price.
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- Managing profits: Create a well-developed plan to meet your financial goals. Know about tax consequences related to sudden wealth. Discuss with reputed financial professionals and find out lucrative investment plans and long term benefits.
You need to follow the above methods and take care of company shares to ensure you sell off much to your satisfaction.