Thinking of selling your business?
Ask yourself these 8 questions first.
Preparation is the Key to Success – Alexander Graham Bell
Are you ready to start something new? Curious about what your options are? Whether or not you want to switch things up, retire, or are hoping that you can make a profit after building your small business from the ground up: Prestigio realizes being an entrepreneur isn’t easy – it has taken diligence and sweat to create your company.
Make sure you’re ready to move on and get the most for your years of hard work by asking these questions before it comes time to sell your business.
Is it the right time?
This question is a biggie. Not only does it need to be asked in relation to the market but it also needs to be asked in relation to where you are at in your career and where the business itself is at. You only sell your business once, so be sure that you are certain that the time is right.
Plan into the future to maximize the sale-value as urgent sales often require a lower asking-price to move in time.
Are my books in order?
If you want to sell your business it goes almost without saying that it is important that your records be up-to-date. This means ensuring that all your paperwork is in order. This includes taxes, accounts, contracts, permits, everything!
Tip: Complicated financial transactions can easily take up to a year to process. Having your books in order helps ensure that the sale you want doesn’t disappear because the fine print isn’t legible.
Am I prepared for scrutiny?
Any potential buyers will be looking through your business with a fine-tooth comb. Not only is it vital that your books be in order but you should be ready and willing to provide profit and loss statements for up to three years as well as complete inventories of property, equipment, and stock. Potential buyers may require additional documentation, so be ready and ensure that your businesses is in order, with neat and tidy records that are ready for their close-up BEFORE you put your business up for sale.
Do I have a plan for my financial future?
It’s wise to speak to a professional before a major transaction like selling your business. A financial professional can help you understand tax implications and responsibilities and ensure that you have a well-rounded healthy financial perspective and hopefully foundation for the future. However, please note, the onus is on you to understand the fine-print; don’t just blindly trust the contract advice that you are given.
Do I know my business’s worth?
Don’t guess how much your company is worth & do not set the price according to your emotive opinion – it needs to be market-related. Get a proper valuation or decipher what it is worth using one of several commonly used calculations based on S.D.E. (seller discretionary earnings) multiples. While you certainly don’t want to under-sell, you also don’t want too high of a price-tag that might discourage potential buyers and lead to your business spending a long time on the market which has a myriad of consequences.
Where are my potential buyers?
You can’t sell anything if you don’t have a buyer. Advertise your business and spread the word that it is for sale in venues where it is likely that potential buyers will be. Work existing networks to ensure that potential buyers know of the opportunity. Are there larger companies within the same industry? Let them know your company is up for grabs. Business brokers may also be an option in some cases. It is worth investigating the popular online forums that serve as platforms to advertise and purchase companies as these are a great place to start.
Why am I selling my business?
This is a good question to ask one’s self. Be prepared to have an answer to share with potential buyers. It is likely they will want to know.
What will I do after I sell my business?
Before you sell your business ensure that you have a plan for what to do afterwards. If you have invested years of your life in building a successful company, consider how you will feel after its sale. Will you re-invest the money you make into a new Start-Up or put it aside for retirement? What will your day-to-day look like after the business is no longer yours?
Prepare with Prestigio
Prestigio is the tech brand that backs entrepreneurs and small business owners.
- Read about the small business owner who won free tech to further their business here [Pro Kitchens]
- Read about Prestigio’s pick from the Gauteng Township Entrepreneur Awards
- Get acquainted with our brand
Still getting ready to launch your Start-Up? Here are some articles with tips for:
- How to register your business.
- Five-things a wish someone told me before starting my own business.
- Just registered your new business, now what?
- The advantages of being a StartUp.
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Please Note: Prestigio is not offering professional business advice. This article is intended for entertainment purposes only.