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If you’re ready to retire from your business or have some other reason for selling a business, you’re probably wondering how to sell your company. If you’ve been saying “I want to sell my business” for a while but haven’t been sure how to start, here are some steps to consider when selling a business.
Step One: Contact a Business Broker
Hiring a business broker can have many advantages. You won’t have to hire a professional evaluator, because a good business broker can help you figure out what a reasonable starting asking price for your business will be. You won’t have to spend countless hours trying to figure out ways to attract buyers because your business broker will know which buyers will be interested in your business, where to find them, and how to appeal to them.
If you’re trying to sell your business in NY, NJ, CT, MA, PA, TX, or anywhere in the US, the merger and acquisitions company to contact is Synergy Business Brokers. We have over 15 years of experience selling businesses with annual revenues of between $700,000 and $40 million throughout the Northeast and beyond. We can advise you on how best to position your business, help you come up with a sale price, and connect you with motivated buyers. All you have to do is get in touch.
Step Two: Gather your Financial Information
When you’re trying to sell your business quickly and efficiently, transparency is key. Potential investors want to see clear, clean books that give them confidence the company is strong, and there are no soft spots that they are going to discover later after the deal is done. You can build trust and project transparency by having at your disposal, and ready to present to potential buyers, things like:
- Federal income tax returns (at least three years’ worth)
- Year to Date Profit and loss statement plus three years’ historical information
- Lists of inventory, equipment, and other hard assets
If you don’t have one in-house, a qualified professional accountant can look through your books and identify any red flags before you sell your business. Luckily, our business brokers have the professional expertise to help you with your financial assets and ensuring the selling process remains confidential and effective.
Step Three: Figure Out How Much Your Business Is Worth
You can’t sell your business if you don’t know how much you should sell your business for. Unless you have evaluated the worth of your business, you have no way of knowing whether or not you are getting a fair price. I may be able to sell my business quickly, but if I do it at well below market value, it’s probably not worth the time I’ve saved. A business broker can help you with this.
The conventional wisdom is that a small business is usually worth a multiple of their annual cash flow. Still, many other factors may be at play, such as being in a desirable location or being in an industry that is poised to accelerate. A smart plan is usually to get an expert third party like a business broker who knows how to evaluate businesses to do an independent, high-quality valuation of your business.