Selling a business is never a decision which should be taken lightly.
Before choosing to move forward and sell your business, you should be absolutely sure that this is something you want to do. This type of decision should not be rushed; when you sell your business, there’s usually no going back. Therefore, it’s recommended for you to take as much time as you need to consider what selling your business will mean for yourself, your lifestyle, and even any employees who may currently work for you. Ultimately, determining whether to sell your business is a choice which only you can make.
Of course, selling a business comes with some obvious pros and cons. Some of the most obvious upsides include solidifying your profits and having more time to pursue other endeavors, as documented by Niche Pursuits.
Of course, downfalls of selling your business can entail losing out on even greater profits later down the line and missing additional professional opportunities. If you do decide to sell your business, there are certain details which you need to be aware of.
Buyers Want a Profitable Business
Entrepreneur notes the interest which buyers have in purchasing businesses which are profitable. Profit and subsequent value are some of the leading tiers which prospective buyers will review before determining whether your business is worth purchasing.
Contrary to certain beliefs, the potential for growth is not a strong point when you are serious about selling your business. Potential is great for getting a business off the ground, but not for selling a business. Therefore, knowing what buyers are seeking ahead of time will save you a lot of frustration and unnecessary hassles.
Prepare to Verify Financial Claims
Before purchasing a business, buyers will naturally have questions about the financial side of your enterprise. Not only should you be in the position to answer inquiries about finances, but you’ll also need the proper documentation to support your claims.
This documentation includes profit and loss statements, website traffic data, bank statements, invoices, balance sheets, and more. Obviously, it helps to have these verification documents prepared ahead of time; this allows you to avoid having to scramble at the very last minute.
When you are selling your business, you need to be aware of the intricate role that timing plays in this process. Forbes explains that an examination of profits over the past three years can provide insight into whether selling your business is a good idea.
As a general rule, rough patches or other periods of professional struggles are not the time to consider selling a business. In cases like these, it is better to put more work into the business, improve its overall standing, and then move to sell later. Trying to sell your business prematurely can cause avoidable stress and distract from more important issues at hand.
Buyers Will Have Questions
As you’re selling your business, you should expect potential buyers to have questions of various natures. As a matter of fact, if a prospect doesn’t have any questions, this ought to send some red flags. The questions may involve dynamics of the business, roles which certain clients or customers contribute to revenue, the day to day working environment, etc.
Obviously, you should answer these questions honestly. Many individuals who are business-savvy have a sixth sense for when someone is attempting to deceive them. Lying about the nature of the business you’re selling can generate unintended consequences later down the line.
Emotional Readiness Matters
Emotional readiness to let go of a business is a critical element which many people overlook. It’s so easy to get caught up in the financial aspects and completely forget about the more personal side.
Completely parting ways may not be the easiest decision in the world, especially if you’ve devoted years or decades of your life to the business. Only you can decide whether you are emotionally ready to let go forever. This is also something you should work out for yourself prior to contacting potential buyers.
Selling a business is typically not a quick and easy process. It requires time, resources and energy. Making certain mistakes, such as leaving out critical information, can cause problems, especially when numbers and finances are involved. If you are in business with a partner, this is another factor which you will have to take into consideration before selling.
Depending on your personal knowledge and the nature of the business, you may or may not need the assistance of lawyers or other professionals. If you have even the slightest bit of uncertainty in any areas of selling your business, professional counsel may prove to be valuable. Ensuring that you’ve covered all your bases will ultimately make this process smoother and less stressful for all parties involved.