Find out how to get the maximum price for your business.
Selling your business is no simple feat. It can be overwhelmingly stressful to find the balance between a proper business valuation and closing a sale in a timely manner. Ultimately, getting the best possible price is the goal, but it’s often easier said than done.
Thankfully, with the help of the business valuations advice on BusinessesForSale.com, overcoming the first hurdle of determining your business’ worth can be simplified.
In this guide, we’ll discuss how to sell your business for the right price.
Tips to Maximise Your Sale
As an entrepreneur, one of the most complex decisions you will ever make is deciding when to sell your business. Obviously, finding the highest selling price is ideal, but it can be tricky to achieve this.
Whatever timing you decide is right for your business, know that it’s never too soon to start mapping out your exit strategy. Having a plan in place means you’ll be ready to jump at any lucrative opportunity that may arise.
Follow these tips to start preparing your business for the optimal sale price.
Figure Out the Timing
There are several different reasons entrepreneurs opt to sell their businesses. While it might become appealing to sell following a declining performance, it’s important to remember this is not the time if you want to maximize your selling potential.
Profit and performance are directly correlated with selling price, so whether your business is achieving climbing profits or tanking, it’s worth taking a step back to determine the right timing for your sale.
Determine the Value of Your Business
Three different angles typically make up the formal valuation approach of a business:
Asset – business assets are added and depreciated accordingly.
Income – current net value of the business’ income with a projection of future cash flows.
Market – estimate of earning potential based on current market demand.
Each valuation approach comes with its set of advantages and pitfalls. Ideally, you will determine the value of your business based on a combination of all methods. It’s best to work closely with your accountant to develop a reasonable valuation figure.
Organize Your Financials
Getting your ducks in a row takes on an entirely new meaning when it comes to setting your business up for sale. After all, the goal is to make your business look as attractive as possible to prospective buyers.
Even if you think you’ve got your books in order, having an audit performed over the last few years of business might be worth the extra costs. The costs upfront will be minimal in exchange for the long-term benefits you will reap from an internal audit. Prospective buyers will value reassurances in the profit histories you provide.
Hire a Business Broker
DIY sales might seem like the best way to maximize your price, but that’s not necessarily the case. Hiring a business broker lets you stay focused on maintaining healthy profits while finding the right fit.
This frustrating statistic shows that 90% of potential business buyers fail. Much of this is due to the fact that they are not prepared. In hiring a business broker, you can help to minimize some of
these risks associated with first-time buyers and you will be able to avoid m&a deal killers.
Look for Pre-Qualified Buyers
Another way to avoid sales falling through with underprepared sellers is to spend time looking for pre-qualified buyers. Look for online services connecting business sellers and buyers.
While an offer might look attractive initially, it’s important not to get overly excited without prospective buyers being pre-qualified. Remember, the primary reason that business sales fall through is due to buyers lacking secure financing.
Hopefully, by following these helpful tips, you can successfully maximize your business’ sales. Above all, you need to understand the importance of valuing your business properly in preparation for sale.
For further assistance, BusinessesForSale.com has a free business valuation tool called ValueRight that can handle the heavy lifting for you. Get your personalized valuation today!
Amrik Virk is the Brand Manager at BusinessesForSale.com. He is experienced at helping connect business buyers with sellers, through marketing and content writing.
Interesting Related Article: “3 Things You Need to Do Before Selling your Business“