by Karen Stern
There are as many reasons to sell your business as there were to start it. Whether you’re retiring, pursuing new opportunities, looking to make a profit, or any one of countless other motives, making the decision to sell your small business is just the first step. The process for selling a business can be overwhelming, not to mention time-consuming.
Here are some tips for implementing a successful exit strategy and selling your small business:
1. Give yourself plenty of time. You should start preparing your business to be sold about three to four years in advance. This gives potential buyers the opportunity to check out trends in your business’s financial history.
2. Perform a professional business valuation. This will help you find out how much your business is actually worth. A good business analyst can also help you discover specific value drivers or eroders that your business is sensitive to.
3. Ensure quality information. While high-quality financial and operational information about your business might not directly influence your purchase price, low-quality information certainly won’t help.
4. Plan ahead for taxes. Tax liabilities can be significant and can take away from sales proceeds. Be sure to plan from both a business and a personal/estate standpoint.
5. Increase profitability. Make sure your operations are as lean as possible. The quality of the underlying earnings will increase the value of your business.
The best way to ensure your sales transaction succeeds is to be proactive. If you have any questions about selling your small business, be sure to contact your business adviser.
Karen Stern (314-983-1204 or kstern@bswllc.com) is partner in charge of BSW Small Business Services, which provides small business tax
and accounting services
Submitted 8 years 327 days ago