What to Do and What Not to Do When Selling Your Business

DO’S

1. Concentrate on operating your company! Many company owners sell because they are tired of running their companies. As a result, many people stop working and wait for a buyer to come along. This may seriously harm your prospects of selling your company. Remember that the selling process might take anywhere from 6 to 18 months. Continue doing what has made your company successful.

2. Continue promoting. Many company owners reduce their expenditures upon selling. You want to maximize revenues during this period, but advertising is not one of them. Buyers dislike seeing that you removed all advertising when listing the firm since it creates doubt on whether or not sales will continue at their present levels.

3. Maintain your inventory. Many company owners reduce their inventory to nothing. In addition to the business, inventory is often negotiated and sold. After the company is sold, you will have time to settle on a price for your inventory and, if required, sell it down. You must maintain the company running regularly.

4. Concentrate on sales. When you are experiencing your finest year ever, it is the perfect moment to sell.

5. Maintain an open mind regarding who, how, and why someone will purchase your company. Buyers purchase companies for a number of reasons. Keep an open mind when it comes to the contract structure. Deals are often made possible by being imaginative.

6. Handle any issues that arise. Employee, customer, and vendor conflicts should be resolved before bringing in a buyer. You don’t want a potential buyer to drop out because of an unsolved issue that arose during the due diligence stage.

7. File your taxes. This is true even if you have an extension. Buyers need finance. Many lenders may want the previous year’s tax returns before lending. You cannot sell your firm unless the buyer has finance.

8. Take care of your bills. You want your suppliers to be pleased so that they will do business with the new owner.

9. Inform yourself. I’ve put a lot of effort into my website. Use this and other resources to learn about the process of selling a company.

10. Use the services of a skilled business middleman. Selling a company is not the same as selling real estate, stocks, or a legal firm. We specialize in the sale of enterprises. It is a full-time job that might be difficult. You and your company need a professional who has taken the time to study the trade and has transactional experience.

11. Discuss the tax ramifications of selling your firm with your tax professional.

DONT’S

1. Do not commit your company to any long-term commitments. This is especially true with leases. This will make the transaction more difficult than necessary. A new owner may have a different vision for where the company should go.

2. Do not purchase any new equipment. The only reason to purchase new equipment while selling is if it is required by law or you will go out of business if you do not. If you acquire a new item, particularly one that is pricey, you are unlikely to return your investment when your company sells.

3. Don’t change any services. If it isn’t broken, don’t repair it. This is true when selling your company.

4. Don’t inform anybody you’re selling. As I previously said, it is normally advisable to keep the sale of your company private. When the sale is completed, you will have plenty of time to notify your workers, customers, suppliers, landlords, and others.

5. Keep nothing hidden. It will ultimately be uncovered. Surprises are a major cause of transaction failure.

6. Do not reduce hours, personnel, or output. Make this your finest year ever. 7. Do not put off selling for too long. Many business owners postpone selling their company. It is tough to know when to sell your firm. If you get the impression that your company “owns” you, it may be time to consider selling. Remember that it takes an average of 6-18 months to sell a privately held small or medium-sized firm. It is not a quick procedure. Furthermore, the amount a buyer is prepared to pay is mostly determined by your company’s revenues. If you are burned out and let sales and earnings to fall, it may be more expensive to wait than to sell now.

For additional information check out these tips for getting a company sold without any issue.