While it is might not be as difficult as starting a company, selling a business presents its own set of challenges. For one, getting your financial affairs in order and providing transparency is legally and ethically essential, especially if you’re planning to pursue other business ventures. If your name is closely associated with the company, you also have to make sure that the buyer will continue to offer or improve the services you provided. Here are some steps you can take to ensure a smooth transition.  

5 Steps of Selling a Business

1. Assess the Value of Your Business

Hire a third-party appraiser to assess the fair valuation of your business. Factors such as sales and receivables, inventories, assets and liabilities, as well as the competitive environment will be taken into consideration. You can use this value as your base for determining how to price your business.

2. Fix Your Financial Situation

It is hard to get a fair price for a company that is suffering from a downturn. To make your company more appealing to prospective buyers, try to widen your customer base and boost your sales by focusing on marketing and promotions. Do these several months before selling a business to project a steady growth.

3. Decide Whether to Sell on Your Own or Use a Broker

If you’re planning to sell to a trusted family member or employee, you might be able to save some money by selling it on your own. Otherwise, you should hire a business broker to help you find more buyers and get the highest price possible. Keep in mind that brokers work on commission, so it would be in their best interest to find the best deal.

4. Prepare Documents

Have your accountant collate and review your financial statements and tax returns dating back several years. Include copies of these along with receipts for equipment, contact lists for suppliers, and any other relevant documents in a briefing packet that you can readily present to potential buyers. This file will help them perform their due diligence and allow for a smoother transaction.

5. Find a Buyer

Selling a business could take anywhere from several months to a couple of years, depending on the industry you’re in. Finding a buyer is the most critical part of the entire process, so you should take your time. If you’re selling on your own, make sure that prospective buyers are pre-qualified for bank financing to ensure that the deal won’t fall through.

If you need assistance with any of the steps mentioned above, get in touch with Zoellner Garten & Co., which serves Cincinnati, Dayton, and Northern Kentucky. This company has over 20 years of experience in the industry. Whether you’re selling a business or planning mergers and acquisitions, their skilled advisors can provide expert business appraisals. Give them a call at (513) 852-2400 for inquiries, or visit their website to learn more about the services they offer.