When You’re the Seller of a Business

There are a number of things you, the seller, can do to ease the transaction when Selling your business.  This article will help you to get familiar with the most important. 

You generally have only one chance to inspire confidence in potential buyers of your business – use it wisely.  Make sure that all your financials, licenses, and taxes are current.  Catch up on any bookkeeping chores that need tending to and take the opportunity to re-familiarize yourself with the ins and outs of your business.  You may well find yourself needing to answer questions and provide details on a variety of topics concerning the inner workings of your business.  Know that this is just part of the process and entirely legitimate for the buying party to ask.  Being ready for detailed questions will minimize your stress and make you look good when you’re in the spotlight.

When you’re in the process of finding a buyer for your business, your employees may catch wind of your intentions.  While it is best if they don’t have to know before you are ready to tell them, you may want to let them know that they are a valuable part of your plans before they get nervous about their job stability and look for work elsewhere.  It is to your advantage to do what you can to keep qualified, experienced employees in your business when selling it; they are part of the assets that will be considered when determining the value of your business.

There are tools available for determining the value, or more accurately, profitability of your business, such as the Profitability Calculator.  It will help you to be realistic about your price and thwart disappointment.  The price truly hinges on profitability.  You will likely want to consider reworking your financials a bit in order to show how much it benefits you, as the owner.  This is the opposite of how most business owners want to show their numbers to the IRS for tax purposes.

Expect, or at least be open to, the idea of financing the sale of your business.  This option may well help you to sell your business more quickly and to a buyer you trust.  Deferred payments are one way many small business owners go about financing the buyer.  Doing a thorough check of the buyer and asking for regular reports once the transaction has been initiated is important to minimize your risk.