3 Important Rules To Follow When Selling A Business

Running a business is a lot of work and, as you get older, you may decide that you want more time for other things, like family, so you want to leave the business behind. A lot of people also find that they don’t have the same passion that they used to and they want to move on to another business opportunity. You have two options if you want to move away from running your business; you can hire somebody to manage the business for you or you can sell it. If the business is doing well, selling it is a great opportunity. However, there are a lot of challenges involved with selling a business and if you get it wrong, you may end up selling the business for a lot less than it is worth. If you are planning to sell your business, make sure to follow these tips.

Get Your Finances In Order 

A business that is in financial trouble is not an attractive prospect for a buyer, so if you are going to sell your business, you need to get your finances in order first. If you are wasting a lot of money, you need to find ways to streamline your spending and save some money. If you have any outstanding debts, you should try to pay them off before you attempt to sell the business. Once your finances are in order, you need to carry out a complete financial audit so you can present a clear picture of the state of the business to a potential buyer. 

Be Realistic With Your Valuation 

Your business holds a special place in your heart, so it is easy to overvalue it. But if you set the price too high, you will struggle to find a buyer that is interested, so you need to be realistic. It’s important to remember that all businesses are different and valuing a funeral home, for example, is very different from valuing a retail business. Subtracting your liabilities from your assets gives you a rough book value for your business, but this figure is not an accurate representation of your business because you also need to consider the future potential of the business as well. It is important that you think carefully about your valuation so you do not over or under value your business. 

Consider Your Legacy 

When you are selling a business, getting a good price is obviously important. However, you have to remember that this is a business that you worked hard to build up, and you are invested in it. Even though you are leaving it behind, you want to know that it will be looked after in the future. That’s why it’s important that you consider the person, not just the price. Look for people that have all of the qualities that make a good business owner and talk to them about their plans for the future of the company. 

Finding the right buyer for your business can take a long time, but it’s important that you are patient so you don’t rush into a bad decision.