How to Sell a Small Business, Step-By-Step
America has around 33.2 million small businesses, according to Zippia statistics. Unfortunately, only about 55% of said businesses may last more than a few years.
Whatever the reasoning, as a small business owner, you may reach a point where you want to sell. This can be a complicated process, but by following a few key steps, you can successfully sell your small business.
In this straightforward guide, we’ll set your mind straight on how to sell your small business the right way. Keep on reading in you want to remove all the worry and hassle from the process.
Determine Your Asking Price
Before you can start the process of selling your small business, you need to determine how much you want to ask for it. This is known as your asking price.
There are a few different factors that can influence your asking prices, such as the size of your business, its location, the industry it’s in, and its financial performance.
One way to determine your asking price is to use a business valuation method. There are several different methods you can use, such as the income approach, the market approach, and the asset approach. Each method looks at different factors to determine the value of your business.
It’s also a good idea to get an assessment from a professional business appraiser when you want to sell a business. A business appraiser can give you a more accurate estimate of your business’s value based on a thorough analysis of your financial records and other relevant information.
Prepare Your Business for Sale
Once you have an idea of your asking price, the next step is to prepare to sell your business. This involves getting your financial records in order, creating a list of your business’s assets, and making any necessary repairs or improvements.
First, it’s important to gather all of your financial records, including profit and loss statements, balance sheets, and tax returns. These documents will provide potential buyers with an idea of your business’s financial performance. You should also create a list of your business’s assets, including any equipment, inventory, and real estate.
It’s also a good idea to make any necessary repairs or improvements to your business before putting it on the market. This can help make it more appealing to potential buyers and increase its value.
Find a Broker or Agent
Once you have determined your asking price and prepared your business for sale, the next step is to find a broker or agent to help you sell your business. A broker or agent can help you find potential buyers, negotiate the sale, and handle the legal aspects of the transaction.
When choosing a broker or agent, it’s important to find someone who has experience selling businesses in your industry. You should also look for someone who has a track record of success and is well-respected in the business community.
Market Your Business
Once you have a broker or agent, the next step is to market your business to potential buyers. There are several different ways you can do this, including:
- Advertising in business publications or online
- Networking with other business owners and professionals in your industry
- Using social media to promote your business sale
Your broker or agent can help you come up with a marketing plan that will reach potential buyers and showcase the strengths of your business.
Review Offers and Negotiate the Sale
Once you start receiving offers for your business, it’s important to review them carefully and negotiate the best deal possible. Your broker or agent can help you with this process.
When reviewing offers, you should consider the price being offered, as well as any other terms and conditions that are included. You should also consider the buyer’s ability to finance the purchase and their plans for the business after the sale.
Once you have negotiated the terms of the sale, you will need to create a purchase agreement that outlines the terms of the sale and any contingencies. Your broker or agent can help you with this process.
Close the Sale
The final step in the process of selling your small business is closing the sale. This involves transferring ownership of the business to the buyer and completing any necessary paperwork.
To close the sale, you will need to sign a bill of sale, which is a legal document that outlines the terms and conditions of the sale. This includes the price, any financing arrangements, and any warranties or guarantees. You will also need to transfer any assets, such as equipment and inventory, to the buyer, as well as any leases or contracts that are associated with the business.
It’s important to work with a lawyer or other legal professionals to ensure that the sale is completed correctly and that all necessary documents are properly executed.
They can help you navigate the legal aspects of the sale, such as tax implications and intellectual property rights, and ensure that your interests are protected. They can also help you handle any disputes or issues that may arise during the closing process.
Sell a Small Business the Right Way
Selling a small business can be a complex process, but by following these steps, you can successfully sell your business and move on to your next venture.
By determining your asking price, preparing your business for sale, finding a broker or agent, marketing your business, reviewing offers, and closing the sale, you can navigate the process of selling a small business and achieving your goals.
We are Fusion Business Services and we understand that selling your business is a major decision. It may even be that your company represents something of your life’s work.
Whatever your situation, we’re ready to listen. Read here to learn more about selling your business with us.
