Selling your company can be an eye-opening activity as you walk through the process. If you believe it will be like selling a home or car, you may be in for a huge surprise. There are many steps you will need to take to get your company organized before you are ready. Here are three things you need to do before you sell your business.
Selling Your Business: Top Three Things To Do Before
1. Value
The first step in selling your business is to understand your company’s value. This is something a lot of business owners tend to overestimate. In truth, your business is statistically likely to value less than you would think.
Business owners overestimate the value of their business due to the time, energy, effort, and feelings invested. There is a slight change, however, that you could underestimate its value, though that is unlikely.
Therefore, to make sure you understand its worth, you need to be objective. After reviewing your books for at least the preceding three months, you can present a better picture of your losses and profits. With those numbers in mind, you can establish a true net worth of your business. Make sure your bookkeeping is clean and accurate, and if there are glitches, fix them, or make notes about the problems that a new owner will understand.
2. Negotiate
Negotiation is always part of the process, especially when selling your business. Regardless of how fair you feel the price is, buyers will never settle on the first offer. The buyers will want to get a deal when they purchase your company, and most will try to undervalue the offer. If you have a set amount of money in mind, you may have to negotiate with several potential buyers before you find one willing to meet your price. Remember to keep your emotions out of any dealings you have with prospective buyers. None of them will care how many hours you spent at the office and how hard you’ve worked.
3. Escrow
Find a company with escrow assistants Sacramento CA that you trust to handle the exchange between you and the buyer. The escrow agent will accept the funds, pay them to you, complete all documents, and make sure the sale is legal. Going this route is generally preferred. It’s a lot simpler and legal. Basically, you don’t have to waste time and energy selling your business because someone else can take care of the legal aspects of the sale.
Of course, finding the right client to meet your price and finishing the paperwork is only half the story. The most challenging part of selling your company will be saying goodbye – and it can be more difficult than you imagine. A lot of business owners tend to have second thoughts at this point. Some experience high anxiety, wondering whether or not they have made a mistake.
Rather than feel sadness at letting something go, remind yourself of all you have accomplished as you built the company. Then walk away to find something new that you can invest your time and energy into. Selling your business is not a sign of failure. It’s a sign of maturity. Knowing when to stop can be just as important as knowing when to carry on.