14 Steps in Preparing Your Business for Sale

Step 1 - Begin by honestly assessing why you want to sell your business. Understanding your motivations will help you make informed decisions throughout the selling process. This is also likely one of the first questions your business broker will ask you as well as potential buyers.

Step 2 - Maintaining confidentiality is critical when considering the sale of your business. It's not just about keeping a secret; it's about recognizing the inherent value within your business.

Your employees, clients, and vendors are more than just associates; they are essential assets that contribute to the success and value of your business. Sharing news of a potential sale prematurely can create uncertainty and can devalue your business.

By safeguarding confidentiality, you not only protect your business but also demonstrate your commitment to preserving its worth. Treat your employees, clients, and vendors as the valuable resources they are, and you'll enhance the attractiveness of your business to potential buyers.

Step 3 - Organize your financial records

As every buyer will want to review your profit and loss statements. Make certain these records are as up to date as possible. Be prepared with a copy of your property lease and any other financial documents, such as your inventory, your accounts payable, and your accounts receivable.

Step 4 - Establish a Realistic Asking Price

Reach out to an experienced Business Broker who can provide a comprehensive valuation of your business. This step is necessary to determine a realistic and competitive asking price for your business. A properly trained business broker will conduct a Market Price Analysis – Valuation providing an objective assessment of your business's worth, helping determine if it's the right time to sell and assisting to set a price that attracts serious buyers.

Step 5 - Depersonalize the Business

Buyers are often concerned that a business heavily dependent on the owner's personality might have revenue decline when the seller transitions out. Depersonalize your business by removing your name from branding elements like menu items, in the case of a restaurant. You may also need to remove personal items and memorabilia to make the business more appealing to potential buyers. Allow the business buyer to visualize themselves in the business.

De-personalizing not only helps with a smooth transition but also avoids any confusion. By making it clear that your favorite art and personal items are not included in the sale, you provide clarity to potential buyers and enhance the appeal of your business; win-win.

Step 9 - Strengthen Customer and Employee Relationships

Maintain strong relationships with your customers and employees. A loyal customer base and a dedicated workforce can be appealing to potential buyers. A business broker can help highlight these valuable assets during the sales process.

Step 10 - Seek Professional Advice

Consider engaging professionals, such as business brokers, accountants, and legal advisors, who specialize in business sales. A business broker can provide expertise in finding potential buyers, negotiating terms, and ensuring a smooth transaction.

Step 11 - Create an Attractive Marketing Package

Your professional business broker will create an appealing marketing package that includes a compelling business profile, financial documentation, and other relevant information. A business broker will validate your business and present it in an organized and professional manner, attracting more qualified buyers.

Step 12 - Continued Collaboration with Your Broker

Work closely as a team with your Business Broker to not only position your business optimally on the market but also ensure that all documentation and information remains current and up to date. Alert your broker of any material changes to your business, positive or negative. This collaborative effort will significantly enhance the appeal of your business to prospective buyers.