Are you planning to sell your business quickly but you aren’t sure where to start? Or are you just not sure whether it’s time to sell your business?
It makes sense given that there are more than half a million new businesses started every month and around ten thousand businesses sold every year.
If you are unsure where to start this step-by-step guide is for you.
In this in-depth guide, I will show you how to sell your business quickly at the highest price.
When planning to sell your business, you need to consider various factors. Before you search for a potential buyer, you need to put your house to make the transfer of ownership a seamless one.
Given that selling a business is one of the most important financial decisions to make, you need to approach the process with caution.
First, after putting everything in order, you need to position your business in a way that attracts potential buyers. So you need a good plan. You will also need a competent financial advisor.
Here are practical tips and strategies you can use to sell your business fast at a good price.
1. Prepare and Plan First
Selling a business is no easy task. It’s a hectic and tiresome process that can take longer or shorter time depending on how well you are prepared.
If you don’t want to prolong the process of selling your business, you need to prepare and plan rigorously.
The last thing you want to see is a buyer asking you certain documents only to find that you don’t have them at that moment and you don’t know where they are.
This sends a red flag to the buyer and could make them lose interest or even look another business to purchase.
Take the time to prepare. Get ideas from accountants, business consultants and other people who have sold their businesses successfully. Seek legal advice from lawyers.
Related: Talk to Advisors Near You
These are the people who will advise about the things you need to keep them ready before you start finding a potential buyer.
Some of the important documents you don’t want to miss when selling your business include:
- Tax returns
- Balance sheets
- Revenue reports
- Customers and supplier lists
- Financial reports
- Inventory reports and other important documents as you will be advised by your lawyers or business consultants
2. Draft a Detailed Business Summary
Writing a business summary is also part of the preparation and planning. Having a detailed business summary ready during the time of selling your business can minimize wasted time by 90 percent.
Besides, a good business summary will make the selling process a seamless and professional one. It can also help you sell your business at the highest price.
Generally, a business summary can be around 20 pages long or shorter than that. It’s mainly a document that tells a potential buyer more about your business.
To have your business summary written appropriately, you may consider hiring a professional broker. Business brokers are individuals who have done the business of selling companies for too long and they know what buyers look for in a business summary.
Don’t make a mistake to write your business summary by yourself. It won’t cover the information you want potential buyers to read.
Hiring a broker can help to make the selling process a breeze. The advice you get from a professional could help you sell your business at a price you didn’t imagine.
To make your business summary as detailed as possible, make sure to capture the following key points:
- Company information - Give a brief history of your company. Talk about when and how you started your company, describe the products or services you offer, your key employees, your locations, etc. You could also mention the number of employees you have.
- Mission statement - Talk about what your business aims to achieve. This includes the daily operations of your business, your core values, and business philosophy.
- Future goals - Talk about what your business aims to achieve in the future. Describe how you plan to increase revenue and whether you are using financial aid, etc.
- Business highlights - Walk the buyers through a step-by-step process of how your business has evolved, how many customers you have accrued, etc.
- Financial summary - If you had intended to seek financial assistance in the future, share your financial summary with the potential buyer.
In your business summary, focus on providing every detail a potential buyer will want to see before buying your business.
3. Plan How to Find Potential Buyers
Usually, a potential buyer may be a retired executive or a competitor. A potential buyer may want to purchase your business for various reasons.
A good way to navigate the waters here is to collaborate with a professional business broker, who knows some potential buyers and what makes them want to purchase a business like yours.
A professional broker will also help you with ideas on how to target potential buyers.
If a potential buyer shows interest, your broker can help to screen them to help determine if the buyer is a good fit for your business.
Even though planning how to identify potential buyers is a complex process, a professional broker can make it simple for you.
4. Create an Effective Marketing Plan
If your business is already performing better than your competitors then you are in advantage.
You also need to show your prospective buyer how they can continue making sales and generating profits after buying your business. That’s why you need to create a marketing plan.
After all, a prospective buyer may want to know the strategies you use to attract customers, how you publicize your business, and many other things - all these shall be included in your marketing plan.
Looking at your marketing plan, buyers can tell whether your business can be continued or it’s going to die soon. So, make it as attractive and convincing as possible but don’t over-promise things.
5. Send The Business Summary to Prospects
During the process of finding financiers, you must have your business plan written. Or you must have come across a written business plan sometime in your career. The same way a business plan helps you attract financiers, a business summary can help you attract potential buyers of your business.
Prospective buyers will want to learn more about your business and you can’t just tell them this in-person. Your business summary does it more effectively.
Find a professional to write your business summary. Note that your business summary is like a key to your business secrets, so don’t just send it to anybody interested in buying your business until they sign a non-disclosure agreement.
6. Evaluate Your Clientele
No one will want to buy a business that’s almost dying. Some buyers will show interest but unless they see the possibilities of reviving your dying business, they will not go further.
A potential buyer wants to see your existing clients and whether they show interest to continue doing business with the company.
After all, customers are the driving force of any company no matter how big or small it is.
Buyers also understand the hassle of finding clients. And buying a business that has no customers will make the buyer do extra work attracting them, which is something most business buyers fear.
You need to show potential buyers that you have loyal customers and that the business will continue to grow even after they buy it.
Let your customers share testimonies so that potential buyers rest assured of business continuity.
7. Don’t Hide Your Business’ Weaknesses
Every business has weaknesses. Therefore, trying to make your business look like it is operated from heaven doesn’t make any positive impact but it can drive potential buyers away.
They know it: no business is perfect. And being sincere about your business’ weakness can increase their interest in buying it.
Once you make them understand the weaknesses of your company, they will know how to tackle those weaknesses upfront.
How to Sell Your Business Quick: Additional Tips
Tip# 1: Use Different Channels and Methods to Attract Buyers
Having done all the above, it’s easier to feel that you are almost nearing the end of the process, but you are not done yet.
To target the right buyers, you need to dig deep into your industry. And to sell your business quickly, use different methods and channels.
Usually, there are different ways to find potential buyers.
You can start by advertising your business in magazines, online marketplaces, or other channels in your industry.
Email potential buyers or call them directly through the phone. With this method, you will have to start with finding their contacts or email addresses which could take time as well.
You can also advertise your business outside your sector. These include newspaper advertising, web media, etc. Each method has its good and bad sides though.
Tip #2: Progress With the Process of Selling Your Business
Having emailed your business summary to potential buyers, chances are that some will show interest in buying it. To speed up the process, you may want to call prospective buyers and inform them that you are open to answer any questions concerning your business.
Having done that, wait for them to call back. Don’t look desperate by calling them every time asking for their progress. A buyer who will like your business summary will follow-up with you to know more about your business.
In case a buyer wants more information about your business, be ready to share it with them at any moment.
Tip #3: The Negotiation Process
Make sure you involve a professional throughout the process of selling your business.
Once you have landed several buyers interested to buy your business, ask them to send offers. Those who are serious will make an offer.
Video: Negotiating a Deal When Selling Your Company | docstockTV
Initially, you need to concentrate on agreeing on the price of your business. You can involve a lawyer to draft an offer once both parties are satisfied.
Note that before you reach the negotiation stage pre-screen the potential buyers to see who is financially capable of buying your business.
To make sure that they are financially capable, ask a potential buyer to provide you with proof of funds. A serious buyer will not hesitate to provide this information.
You can always reject an offer once you have scrutinized a buyer and found some problems with them.
Here are a few negotiating tips when you are selling your business:
You need to do enough homework first to know how to value your assets or else, potential buyers will take advantage of you and give you a lower offer. You can seek help from business consultants and professional brokers here as well.
Have a range of values in mind
Having researched thoroughly about how much you should value your business and consulted different stakeholders, you need to come to the table with a range of values. While negotiating, don’t keep on changing this value instead, stick to what you said as this will show the buyer that you are confident about your price.
Some buyers will take advantage of you if they notice that you are changing the price very fast going down instead of sticking to your initial ask.
Tip #4: Finally, Sell Your Business
This is perhaps the last step and you should collaborate with the buyer and other stakeholders to make the transition a successful one.
You need to prepare for the transition for about a week beforehand. Keep all the documents and records ready so you can hand them over to the buyer. Here, you also need to work with a professional business consultant or broker.
Tip #5: Allow Some Flexibility in Payment
To attract potential buyers offer them flexible payment options. For instance, you could allow buyers to pay in installments after paying the down payment.
This will give them a room to buy your business while at the same time settling other things on their end.
How to Sell Your Business Quickly: FAQs
In case you have some questions not answered about how to sell your business fast in this article, below are the most frequently asked questions.
How much should you sell a business for?
There is no flat figure when it comes to evaluating your business. However, if you are selling a profitable and healthy business, you can value it at 5 to 6 times the EBIT range. This is to say that when your business’ annual cash flow is $300,000, you need to sell it at between $1,000,000 and 3,000,000.
Why would someone sell a profitable business?
Beyond financial and personal needs, other reasons why someone would sell a profitable business are weariness or everyday stressors. Some people will sell their otherwise valuable business to start other ventures or if they aren’t interested in current business operations.
When is the perfect time to sell your business?
There is probably no perfect time to sell your business but still, you should look for a good time.
To tell whether it’s time to sell your business look for the following indicators:
- Your business readiness for selling.
- The state of the market to facilitate the effective selling of a business.
- Related: How to Get the Timing Right...
It’s worth noting that selling a business is no easy task. If you try the go-it-alone way, you will find the process more complicated and it may take you forever to complete it. That’s why experts recommend involving a professional to help you in the process.
Selling your business is one of the biggest decisions you will ever make. It’s not an easy thing to do and it can be time-consuming. You need to prepare and follow the strategies we have outlined in this article.
Leon Collier is a blogger and academic writer from the UK. He works with dissertation-today.com, a writing company that offers writing help. When he’s free, he loves reading books and playing tabletop games with his friends. Follow him on twitter @LeonCollier12