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If you have spent most of your professional life building and growing your business, you have also probably planned your exit strategy. And, if this plan includes selling your business in 2023, it is now time to get ready for this important move.
While a lot will depend on how well you have managed your business and how successful your enterprise is, there are strategies that you can use to maximise your return from selling your commercial entity.
Unsure how to get started? The tips below can give you a better idea of what to do during the selling journey to make the most of this step. Let’s dive in!
Work With a Business Broker
The first step is to work with a professional business broker. An experienced specialist who understands the ins and outs of small business transactions can help you better understand what’s ahead and guide you in the negotiation process.
Additionally, business brokers are trained to carry out the necessary due diligence and handle all compliance involved with buying or selling a business. This can free up a significant amount of your time and energy, which you can redirect toward future plans.
Invest in a Professional Valuation
One of the critical mistakes you could make while selling a business is to price your commercial enterprise too high or too low. Underselling your business can cause you to leave money on the table, especially if you have spent time and resources building a successful business. On the other hand, overpricing your commercial enterprise might scare away buyers. And, don’t forget that a small percentage of businesses actually sell once they are on the market!
So how can you be sure to put out an offer that is both in line with the market and reflects your business’s real value? There is only one answer: invest in a professional business valuation.
Knowing how much you can sell your business for can guide you in the negotiation process and ensure that you are getting fair compensation.
Sell When Revenue and Sales Are at a High
Over the lifespan of your business, you are likely to experience highs and lows, moments of growth, and setbacks. While these are normal and part of a business’s lifecycle, it is important to understand when to put your business for sale.
Ideally, you should choose a moment when debt is at a minimum, sales volume is high, and the growth rate is following an upward trend.
Get Your Financials in Check
One of the key steps to take before selling your business is to put your finances in order. Learn more about where your commercial enterprise stands financially and go over your books to ensure that there are no mistakes or discrepancies.
This will make it easier for business brokers to evaluate and promote your company on the market, and you might find it easier to gain the interest and trust of potential buyers.
Plan Your Exit Strategy
Lastly, don’t forget that you should never try to sell your business in a rush. This will set you up for unsuitable deals, low returns, and even compliance issues. Instead, plan your exit strategy several years before selling your business, and start getting ready for your move at least 1-2 years in advance!