Selling Your Business: Knowing When and How To Do It

Guest Author Ed Carter explains how you identify when to sell your startup and how to do it in a manner that is in your best interest.

Photo via Charles Forerunner on Unsplash

According to statisticians, there are more than 31 million small businesses in the United States. As the owner of a company that has proved profitable, you own a valuable commodity that many entrepreneurs would clearly be interested in taking over. Today’s article from Texas Innovators offers a few reasons you should consider selling and how to go about the process in a way that is most advantageous to you.

Thinking About Selling

There are good reasons for selling your operation. To start, the stress of running a startup is enormous. It can have a terrible effect on your health, causing everything like stomach aches, sleep troubles, and substance abuse. Selling removes an enormous stressor from your life.

On the other hand, you may decide that your business is no longer challenging. It is time to set your sights on new horizons. You want to enter an exciting new field or obtain an advanced degree.

As a matter of fact, the knowledge that comes with earning a degree such as an MBA can help you identify the right time to sell, determine the value of your business and understand how to get the most money when selling. Enrolling in online programs allows you to develop marketing, strategic planning, research, and accounting abilities right from home. By pursuing educational opportunities from your computer, you will have maximum flexibility to balance work and school along with family life.

Preparing for a Sale

There is much involved in readying your business to hit the market. Start by getting estimates of how much your enterprise is worth. A comparison of valuations from trusted professionals can be illuminating.

Next, gather all relevant documentation. Interested buyers usually want to see at least three years' worth of financial records. Besides tax returns, collect formal statements, such as those generated by an accountancy review. You should also have leases, permits, vendor contracts, and other related information gathered in one easy-to-access file.

Finally, consult the experts. You should already have a financial advisor. Ask that person about the tax implications involved in selling. Hire an attorney who is familiar with mergers and acquisitions. Think about the benefits of working with a broker who can act as an intermediary during the negotiations process.

Making a Sale

Finding a buyer is usually a time-consuming process. Speed it up by maximizing your company's appeal. From the moment of your outfit's inception, adjust your business to match suggestions from parties that might have an interest in pursuing a deal. Conduct research on what appeals to these buyers and understand their true motivations.

Networking is the best way of finding someone interested in purchasing your venture. Nurture relationships as long as you are in control. By the time you are ready to sell, you should have a surplus of names worth contacting to help you spread the word.