What to Know When Selling Your Business

Mar 28, 2022 | 1 comment

As a business owner, the decision to sell your business can be a difficult and emotional one. However, with the right planning and preparation, you can ensure that the process goes as smoothly as possible. Here are some things to consider when preparing to sell your business:

  1. Determine your goals for the sale: Before you start the process, it’s important to know what you hope to achieve from the sale. Are you looking for a high price, a quick sale, or something else? Understanding your goals will help guide your decision-making throughout the process.
  2. Understand the market: It’s important to have a good understanding of the current market conditions and the value of similar businesses in your industry. This will help you set a realistic price for your business and understand what potential buyers may be willing to pay. 
  3. Gather financial documents: In order to sell your business, you’ll need to provide potential buyers with financial documents such as profit and loss statements, tax returns, and balance sheets. It’s a good idea to start gathering these documents early in the process so that you have them ready when needed.
  4. Make necessary repairs and updates: Before putting your business on the market, consider making any necessary repairs or updates to improve its appearance and value. This could include things like painting, cleaning, or updating equipment.
  5. Consider working with a business broker: A broker might be a good fit for you, but they might not. Talk with us & see if you’d like to get someone on your side of the transaction to advise you. Brokers come in all shapes & sizes. They can be great or they can be self interested. Use wisdom when talking with a broker & don’t just sign with the first one you talk to. You may also be able to handle this process yourself when working with a sophisticated buyer who you align with strategically. (That’s our pitch at Doran Holdings). We only make deals that work well for both parties. 
  6. Be prepared for due diligence: During the sale process, potential buyers will likely conduct due diligence to verify the information you have provided about your business. This may include reviewing financial documents, visiting the business, and speaking with employees. It’s important to be prepared for this and have all necessary documents and information readily available.
  7. Consider your exit strategy: You’ll need to decide how you want to exit the business and what you want to do after the sale. Will you stay on as an employee or consultant, or do you want to completely sever ties with the business? Having a clear exit strategy can help make the transition smoother for everyone involved.
  8. Plan for the future: Finally, it’s important to think about what you want to do after you sell your business. Do you want to retire, start a new business, or pursue other interests? Whatever your plans may be, it’s a good idea to start thinking about them early in the process so that you can make a smooth transition to the next phase of your life.

Selling a business can be a complex and emotional process, but with the right preparation and planning, you can ensure that it goes as smoothly as possible. By understanding your goals, understanding the market, gathering financial documents, making necessary repairs and updates, working with a business broker, being prepared for due diligence, and planning for the future, you can position yourself for a successful sale.