subject: How to Sell a Business for Maximum Profits [print this page] How to Sell a Business for Maximum Profits
When you prepare to sell a business, start by considering all of the assets related to itboth tangible and intangible. The latter category includes client lists, good will, and trademarks, and they definitely contribute to the total worth of any business operation.
If the business you are selling is a corporation, you must also determine whether ownership will be transferred through an asset sale, in which the company itself is not sold, or a share sale, in which both the company and the related assets are sold.
Establishing your asking price
A number of methods are used in business valuation, including future-earnings and asset-based approaches, and this is always done in conjunction with current economic trends, market conditions, and the value of similar businesses at the time. A professional business valuation is also essential because it will be taken more seriously by potential buyers and in court, if needed, and it may also ensure that you will be able to avoid legal complications in the future.
Even if your interest in running the business has begun to wane, you will want to take the following steps to spark the interest of potential buyers, just as those who are preparing to sell their home make sure that the property has an abundance of what real estate agents call "curb appeal":
Keep the operation running smoothly and the customers coming.
Make sure that your records are kept current and that the inventory is at least adequate.
Try to reduce your liabilities to a minimum by ensuring that your taxes are paid and settling any lawsuits that may be pending.
Getting professional help
Anyone who has ever sold a business will tell you that it can be quite complicated, and that there is significant emotional impact as well. If you hire some professional help when selling a business, that should enable you to remain calm and maintain your objectivity in order to complete the sale.
A business broker or commercial realtor can be very helpful in regard to locating and negotiating with potential buyers, and help guide you through the entire process. In addition, an attorney can review or draw up the documents you need to complete the sale, including a summary of the business and the legally binding sales contract.
Sell to the right buyer
While it may be tempting, accepting the first offer you receive may turn out to be a mistake, For example, if the buyer agrees to your asking price, but there is little or no down payment and an extended contract is required, the entire deal could fall apart and you would suffer a substantial loss. Also, the new owner may cause your business to close, no matter how successful it is, if that individual lacks leadership skills, has little business experience, or is unreceptive to new ideas.
