5 Steps to Prepare Your Business for Sale

December 2022

If you are considering selling your business, whatever may be the reason, you need to take the time to plan. Selling a business is complex and requires a lot of research and planning before you can get it done. You must take care of several things when listing your business for sale.

It can be daunting for newer business owners to handle this by themselves. Instead, opt for an experienced business broker like First Choice Business Broker, who has worked with hundreds of business owners in Charlotte.

Here are the five steps that will help prepare your business for a sale

Highlight the Reasons for Your Sale

One crucial question buyers will ask is, "Why are you selling your business? “ You can prepare for this question by highlighting your reasons for selling. What you convey here gives the buyers insight into the company they're buying.

There are several reasons why people choose to sell their businesses. It could be anything from retirement or personal circumstances. The key here is to be positive and transparent in your response.

If you're selling a business with negative sentiments, it can be challenging. Negatives can include low profits or bad customer reviews. Potential buyers are less likely to follow through when a sale has negative aspects. It's a good idea to talk to a business broker first so they can suggest alternatives. A business broker can give you some ideas to approach the sale with an optimistic viewpoint.

Understand Your Business Valuation

An accurate valuation is the central document of a sale that sets the right price for selling your enterprise. Without the valuation document, an arbitrary number would be the price. There are two likely outcomes of a random number as the price.

First, you could suffer a loss when your number is too low. Or the other possibility is setting the price too high, causing your business to sit on the market unsold for a long time, signaling a problem to potential buyers. Either outcome is undesirable during a business sale. An accurate valuation with verifiable data to support the price will draw the right buyer and close a successful deal promptly.

An accurate valuation requires a combination of successful tools that align with the sales strategy, market comparable, and other metrics. Buyers are apt to trust a valuation prepared by an objective third party. Business brokers like FCBB have decades of successful valuations of businesses in Charlotte.

Fix the Right Time for the Sale

Finding the right time to sell your business can take time and effort and directly affects how well the sale goes. Give yourself adequate time to prepare for the sale. Rushing into it will only end up with you either losing money or delaying the sale.

Researching how other businesses approach their sale can give you some insights into the best times of the year to sell. There are periodic trends that you can rely on when it comes to selling your business. Learning to read the market can be helpful when timing your sale.

All these variables can be complicated for the average business owner to navigate. Consultation with a business broker can give you valuable insights into the right time to sell with accurate forecasts to achieve a great price.

Due Diligence and Verifiable Company Documentation

Company documentation is a vital part of the sale process. It is how buyers validate the valuation and ensure that your business has followed all the rules and regulations. The buyer's due diligence can take time during a sale. The key to smooth due diligence is preparation and transparency. When you have documentation readily available at the buyer's request, it is reassuring for the buyer that information is not being withheld.

Depending on the company's size, there might be a large amount of documentation to get through. Some examples of this are tax forms, financial reports, payroll, billing statements, and more. Ensure that all your returns are filed and updated with your accountant.

If you're finding this too much, it might be the right time to call a professional business broker like FCBB. Our experience in the niche ensures we provide an accurate valuation while you focus on day-to-day operations of your business that need your attention.

Decide On Using a Business Broker

There are many benefits to using a business broker to keep your business safe and well-protected during the sale:

● An Accurate valuation
● Maintain Confidentiality
● Access to professionals; accountants, lawyers, bankers, real estate agents, and advisors
● Completing documentation and legal transactions
● Successful negotiations
● Help the owner provide transparency during due diligence
● Choosing the right time to sell your business
● Help owners understand the valuation and market comparable in your niche
● Guide owners to approaching the sale with optimism

Hiring a business broker reduces the risks of a sale process considerably, avoiding financial and legal ramifications.

A business broker in Charlotte will leverage the valuation of your business during negotiations. They will negotiate for your best interests, close the sale and follow through with a successful transition to the new owners.

First Choice Business Brokers Charlotte has access to a vast network of potential buyers to match to your business with qualified leads.

FCBB provides a detailed step-by-step approach to guide you in preparing and completing your sale. Qualified advisors with decades of collective experience provide a positive experience for business owners and buyers. Head to our website to schedule an appointment today!