Preparing to sell a business may not be as straightforward as it seems. Selling a business requires a balance between enticing buyers for the business and, at the same time, keeping the current customers happy. If the customers are unhappy then the business value drops and the sale may not go as planned. If a person goes into selling a business without planning or the knowledge of how to do so, they may end up losing money.
The following list explains the first steps a person should take to prepare to sell while also keeping customers happy.
Get a quote on the value of the business. This is extremely important. If a business owner asks too much, they may have a hard time selling, but if they do not ask enough they are losing out on valuable revenue. A professional can help with this because they usually know how certain time and economic factors can contribute to the value of a business. But you should also do your own research. You are the best source to know your own niche market. This appraisal should be done before selling to get the actual value.
Determine if the sale will be public or private. If there is a chance that customers will be lost once they find out the business is sold, then it is wise to do a private sell. This way the new owner will have a chance to gain their business. Also, will the employees stay or will they leave for fear of the upheaval of new ownership? Most buyers would like to see that a business could withstand any changes that can come about with a sale. These factors should be considered when determining if a sale should be public or private.
Set up a marketing campaign. Just as a business owner needs to advertise their products, they need to advertise the sale. The marketing efforts will be largely based on the type of sale, either public or private. In the case of the private sale, an example of this may just put the business name out in the public by advertising donations to charities. Just remember, the appearance of the business can help determine the value. This goes for physical appearance as well as just appearing financially secure and stable.
Prepare all information to show buyers. Potential buyers will likely be interested in seeing all the details of the business. They will want to know why the business is being sold and will need to see financial statements and tax returns in order to make an informed purchase. A business is perceived as much riskier with no solid financial history and that can decrease the sale value.
Preparing by doing these four steps can make selling a business easier. The key is they can be done up to years before the actual sale. But, they are also just the tip of the iceberg. They do not cover every aspect, like legal and financial considerations, so a business owner should contact their lawyer, accountant, and other professional assistance to ensure everything is done correctly.