One of the main goals of many startups is to sell for millions; but how do you accomplish that goal? First determine the reason for the sale, and then you have to make it as appealing as possible. Finally, you have to set your price, find a buyer, and gather your paperwork.
Buyers find businesses that solve everyday problems to make life easier as some of the most appealing to purchase. Businesses with great teams and reliable management are also appealing. But the thing that really drives sales is growth. In order to make your business more appealing and to get the best price for it, work on increasing your profits. It you are able to show proof of constant income, a strong consumer base, and major long-term contracts, you can ask for top dollar.
Setting the price can be confusing. You don’t want to ask for too little or too much. One-way to help you determine how much to sell your small business for is to get a valuation from a business appraiser. This document can be used as a haggling tool later on. Once you set your price, its time to find a buyer.
One of the first questions a buyer will ask is why you are selling; and it is important to pinpoint the reason. You could be selling so you can retire or possibly because of some personal hardship. If you are selling because the business is failing, you’ll be hard pressed to see a good return on your investment. If this is the reason you either need to sell early on in the decline or work towards a turn-around before you find a buyer.
Once your reasons for selling are clear and you’ve found a buyer, you’ll need to prepare for the sale by gathering at least 4 years of tax return records and financial statements. A list of all the equipment included in the sale and an up to date manual of how the business is conducted will also be useful.
Selling your business is a time consuming and emotional venture so make sure you are getting your money’s worth when the last page is signed by following these steps.