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How to sell your business

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When you start a business you might have an idea of how long you want to keep it before selling or you might not have any intention of doing so in the beginning. However, often people see the benefits of selling up and maybe starting something different. If you’re considering selling your business, what is the right approach to achieve the best possible price? Here is our guide on how to sell your business.

When to sell

The timing of your sale can make a huge difference in the price you eventually sell for. Therefore, it’s vital that you put your company up for sale when the market is in your favour. There’s no point losing out on the sale price just because you rushed into a deal or didn’t take the market into account. In order to achieve a beneficial price for the business, you need to wait for a good financial climate, analyse the current trends in the market and ensure there is a good availability of possible buyers.

Getting ready to sell

selling your businessIt’s not just the timing that’s important, but also how you prepare your business for the sale. If you get this right everything else should follow smoothly. The business needs to be profitable, show future earning potential and have minimal risks to a buyer. You should look at all the aspects of the business, such as financial, environmental and personnel, and review any issues that might arise. There are certain factors that can devalue a business, such as an ongoing legal battle or an unpaid tax bill. It’s important that you take care of all these issues before putting a business up for sale. There’s no point trying to hide anything and hope a buyer won’t notice, as everything will come out when they perform their due diligence process.

Have the right team

For a business to be sold successfully, it’s crucial that it doesn’t rely solely on one person. If the smooth running of the business is reliant on your input it won’t be as attractive to a buyer. Therefore, you need to have the right management structure in place prior to starting the selling process. They will be able to keep the business running and make sure that it’s ready to sell. You should employ individuals who can focus on key areas, such as sales, marketing and finance, which will allow you to concentrate on the sale without it affecting the day to day operations. It will also offer continuity once the sale has gone through, as the key management team will already understand the business and can bring the new owners up to speed.

Don’t rush

It takes time to get the right deal for a business, so you shouldn’t be in a rush to conclude the sale. Whilst the process is ongoing you should ensure that the business continues to operate as normal, as this will be in the best interests of the new owners and will aid the sale. Even when a deal is agreed, there is still the possibility that it might not come off and nothing is definite until the contracts are finalised.

The better you have prepared a business, the more likely it is to sell quickly. However, you don’t want to lose out on all the effort you put in to establishing a successful business just because you rushed the final arrangements.

 

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About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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