How to Sell Your Business
When you first started your business, odds are you thought it would be something you would be doing forever. Still, some people grow tired of their business, some just want something new to do and others can’t keep up with the demands of time/money their business requires. If you want to get rid of your business you could simply close up shop, or you could sell your business. Here are the steps to take should you choose the latter:
1. Decide you want to sell a year or two before you actually do it. This will give you time to evaluate whether or not you really want to let it go, start looking for potential buyers, determine the worth of your business and so on.
2. Get your books in order and consider getting an appraiser to give an unbiased evaluation of how much your company is worth. Determine your debts, your assets, projections for the future etc… If you have an attorney you may also want to discuss with them the legal ramifications of selling your business.
3. Decide whether you will sell on your own or work with a broker. Although selling on your own will save you the commission fees, a broker may find potential buyers you never thought of and potentially sell it for more than you thought possible.
4. Next, you will need to prepare all of your papers for potential buyers to review and determine an asking price. Once a price is determined you can begin hunting for a buyer.
5. Draw up the paperwork for the sale. What will the sale entail? Does the buyer get your contact list along with your equipment, domain name and social media handles? Will there be a transition period where you will be paid to train and consult on the business? All of this must be decided in advance of the finalization of the sale.
6. The final step is to actually sell the company and hand over everything the buyer has purchased. This can be an unexpectedly emotional time for some business owners so if needed you might want to discuss it with a counselor or a mentor in advance, during and after the sale.
A word of caution if you are hoping to sell your business: Make sure the business isn’t dependent on you. A business that depends heavily on the presence of one person to succeed—such as a creative services business where clients are paying for your personal talent or expertise—can be very difficult to sell to another buyer. “Generally, if your business relies less on the owner, you get a higher selling price,” said Jock Purtle, a broker of Internet businesses who runs Digital Exits, a Sydney, Australia–based firm that does 90 percent of its deals in the U.S. “If the operations are managed by staff or systems or technology and there’s less day-to-day importance of the owner, you’re going to get a higher price.”
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