Sell My Business
Sell My Business - BGES
Introduction
When you are wondering how I can sell my business. What are the strategies and steps that I need to follow? We got you covered with this article. An exit strategy for a business is a well-thought-out plan for selling the business. Finding out why you want to sell your company, making sure it’s in the condition it needs to be in for a sale, and choosing the right time to sell are the first steps.
An exit strategy is used by business owners, investors, venture capitalists, and private individuals to either maximize profits or minimize losses when selling company assets. You, your company, and your investors are all protected by a business plan for an exit strategy.
Why do you need a good strategy when you think of how to sell your business?
- An exit strategy refers to the method by which you plan to transfer ownership of the company upon your departure. After making significant investments in the new business, an exit strategy will help to guarantee a healthy return on investment. Regardless of the success of the business, exit strategy planning is essential.
- Exit strategies are necessary for both small and large businesses. Exit planning is distinct from failure planning. For example, you may establish a business to sell when you reach your profit target. Alternatively, an exit strategy is useful if you plan to retire.
- Exit planning for a small business is a prerequisite for securing financing. Along with a business plan, an exit strategy will inspire investors’ and creditors’ confidence. The exit strategy describes how you intend to limit investors’ losses in the event of business failure.
- Additionally, a business plan for an exit is advantageous for ensuring a seamless transition. For instance, leaving a company that you helped found can be stressful. Emotions can easily affect rational thought. Consequently, a strategic exit strategy can assist you in making challenging decisions and safeguarding your finances.
What are the factors that you need to take care of while selling a business?
1. Understand the market leverage
Supply and demand are crucial factors. If there are fewer companies available for sale than there are buyers, sellers have the upper hand. Those who intend to sell a business within the next few years should take advantage of the current market’s low supply/high demand conditions.
The health of your industry’s business cycle is equally important to the viability of a business sale as the economy. When your industry is growing rather than declining, buyers will place a higher value on your company. Put yourself in the lead. When your company is still expanding, exit.
2. Set your timeline and do not rush
The preparation for sale is of utmost importance because you need to do your due diligence for a profitable sale. It is usually advisable to start a year or two before the final sale. You can increase the profitability of your business by improving your financial records, organisational system, and clientele with the help of preparation. These upgrades will make it easier for the buyer for future operations and your company will be viewed in a positive light. Sell a business, it usually takes months to a year or more. A specific date becomes more significant as you get closer to retirement. You risk missing out on once-in-a-lifetime opportunities if you aren’t ready to start the exit strategy process right away.
3. Documents preparation is important
Gather your tax returns and financial statements going back three to four years so that you can review them with an accountant. Make a list of the equipment that is included in the business sale as well. Ensure to systematically list people to contact for sales and supply transactions, and locate any pertinent documents, such as your current lease. Hand over copies of the changes to your buyer to emphasise transparency.
You should also include an overview of how the company operates in your information packet, as well as a current operating manual, if possible. Make sure that the company is well maintained including the physical assets and fixed assets. Before the sale, any areas of the company or deteriorated equipment should be repaired or replaced.
Read: Business Sales
Conclusion
It takes time and is frequently an emotional endeavour to sell a business. The burden can be lessened by having a good reason to sell, the existence of a “hot” market, and professional assistance. At BGES we can assist you with the exit procedure and make the transition as smooth as possible, so you don’t have to.
