Selling a Small Business Checklist
Selling a small business is no task for the faint of heart. Between preparing your business for sale, finding a buyer, agreeing on terms, and closing, the process can be timely, confusing, and stressful. Luckily, Sunbelt Business Brokers is here to guide you through several of the most important steps with our Selling a Small Business Checklist.
Preparing Your Tax Records
Detailed financial records are key to successfully selling a business. Work with your accountant to put together at least three years of financial statements and IRS tax returns. Providing anything less will leave buyers skeptical of your business and its history. Financial statements and tax records are crucial to prove a small business’ worth and will be used throughout the selling process.
Contacting a Business Broker
Once you have gathered your financial statements, contact an expert business broker. It is best to hire a broker that has relevant experience, strong referrals, and a proven track record. With an extensive network of contacts and business resources, an experienced business broker will not only reach potential buyers, but also value your business, write a selling memorandum and confidential teaser, guide you step-by-step through the closing process, and much more.
Consider working with Sunbelt Business Brokers of Lafayette. Our brokerage network sells more businesses than anyone in the world and serves a wide variety of companies.
Valuing Your Business Correctly
You might be wondering, “How do I put a price on my business?” To you, it may be priceless, but ultimately your business is only worth what someone else is willing to pay for it. To make a sale quickly and effectively, you must value your business correctly.
Valuation methods differ based on standards of value such as fair value, investment value, liquidation value, and fair market value. During the valuation process, many people enlist the help of a broker to provide a “broker’s opinion of value” (BOV). Because brokers have industry expertise, knowledge of your local marketplace, and information on comparable sales, a BOV provides the seller with a credible, realistic value of his or her business.
Preparing the Sale Contract
When the time comes to prepare the sale contract, you’ll need to work with your business broker, as well as your attorney. While the broker can put together the set terms of the sale, your attorney should ensure there are agreements in place to protect both you and your business.
Ultimately, selling your small business is a challenging yet rewarding experience. If you’re in need of a partner to guide your through the steps of selling and ensure you receive top dollar for your business, contact your local Sunbelt Business Brokers office. Our experienced brokers have the expertise and market knowledge to make selling your small business a breeze!
After obtaining his MBA, John began his career at PriceWaterhouseCoopers, the international accounting and consulting firm, and subsequently joined Progressive Corporation, a large U.S. based insurance company. John was a Division President at Progressive and subsequently became the CEO of a New York based private equity investment company. In 2001, he founded MMI as a platform investment company and MMI has subsequently acquired 15 additional companies.