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.


Make the move as smooth as possible by developing an exit strategy. After all, your business is your legacy, so you want it to thrive. Consider staying on for a stretch after selling. This will help with the transition and ensure your company remains on solid footing once you are gone. Mull over who should be chosen as your successor and inform employees that a deal is in place at the appropriate time.


There may come a time when selling your business makes sense. Act diligently after you have decided to leave your enterprise in someone else's control.


 

About Ed Carter


Ed is a guest author for Texas Innovators who specializes in financial literacy for adults with disabilities and parents raising children with disabilities.


Currently, Ed runs his own site called ablefutures.org which incorporates articles, blogs, resource links, and more information that is free to those with disabilities.


Over the years, I’ve worked with clients of all ages, backgrounds, and incomes. About 10 years into my career, I saw a need for financial planners who specialize in helping individuals and families living with disabilities. Regardless of their nature or how long they’ve affected someone, physical and mental limitations often cause stress and confusion when it comes to financial planning. Many people are unaware of just how many options they have when it comes to financial assistance and planning, so it’s an honor to offer my experience and change people’s lives for the better.


Now that I’m retired, I’m committed to continuing my services, even though I work on a broader scale than when I was working 9 to 5. I now spend my free time writing financial literacy articles for people to share on their blogs, collecting resource links for people to share on their websites, and collaborating with like-minded folks who want to make a difference.


Subscribe to our mailing list below by entering your email in the 'subscribe form!'