Selling a business, or its assets, can be a stressful experience for the business owner. However, there are certain steps the business owner can take to avoid some of the stress and headaches. Just as you created a business plan when you started your business, you should create a plan for selling your business or its assets, and follow these guidelines.
First, you need to determine why you wish to sell the business or the business assets. Your potential buyers will also want to know this, so make sure that you have prepared a good answer. Common reasons for selling a business are retirement, illness, divorce, and relocation. Other reasons can include a dispute with a partner, death, and poor business performance. Common reasons for selling off the assets of a business are to increase the operating capital on hand, or to use the proceeds towards the purchase of new equipment or assets.
When a business owner is simply selling off assets, the business is not ending or changing hands. Once you’ve made the decision to sell, you must decide how you will sell the business or its assets. If you are selling the business, using a business consultant is a good idea. There are also business advisors who can help you sell business assets. The next step is to put a value on the business and/or the business assets. An accountant or business consultant will be able to assist you. It is important that you understand how the accountant or business consultant is valuing the business or business assets. Be sure that you ask them for an explanation, so you can determine if the price they have suggested reflects fair market value. Once your business or the business assets are put on the market, things will become very intense.
It is best to prepare both the business, and yourself, for the sale before the business is listed on the market. Preparing the business entails gathering and preparing all of the documents that potential buyers will want to see. This holds true for assets as well. For the sale of a business, you will need financial statements, tax records, profit and loss statements, and other pertinent documentation. For assets, you will need documentation that shows the original price, operating manuals, and maintenance records. Depending on the assets in question, other records or documentation may be needed as well. You should also prepare yourself for potential questions that prospects may ask. Talk with your business consultant to find out what questions you should expect, and make sure you have formulated your answers ahead of time.