Over the past year, many owners have been working hard to keep their businesses afloat. At times, having to reinvent or resize their company to stay competitive amidst the pandemic.
Now, as things are turning around, you may be asking yourself, Should I sell my business?
As valuations continue to go up, and buyers remain eager to spend their money, it’s prompting to be a big year for business owners.
If you’re thinking about selling your business in 2021, here are some steps you should follow to achieve the best price and experience.
Step 1: Get a Business Valuation
If you’re considering selling your business, knowing its true worth is essential. Once you know the value of your business, you’ll have the opportunity to increase its worth before listing to achieve a higher selling price.
In today’s climate, business valuation experts will be highly assessing your 2021 revenue and earnings. Meanwhile, ignoring your 2020 profits. That’s why it’s crucial to get your business to where it was PRE-COVID or better.
For a free business valuation, use our tool to discover your company’s worth in minutes.
Step 2: Organize your Financials
Buyers are shifting their focus to businesses that not only survived the pandemic but will provide long-term viability too. Before choosing to make an offer, they’ll want to know everything about your business – from your financial statements and taxes to your inventory and equipment.
This is the time to take care of any outstanding orders, like tax liens or PPP loan forgiveness, that can prevent any sale from going through. For a smooth transaction, meet with a business advisor to review your financials before you begin the sales process. Make sure to be as transparent as possible with your business advisor to avoid misrepresenting your company to potential buyers.
Step 3: Prepare your exit strategy
Most business owners today have been through 2 downturns – the Great Recession and now, the COVID-19 pandemic. You shouldn’t wait until the next downturn to sell your business – it’s always good to sell when things are getting better.
Putting a sound plan in place will help facilitate a faster exit when the time comes for you to sell your business. It can also help you achieve a higher return on investment.
The other reality is that baby boomer business owners will be looking to retire in the upcoming years, overwhelming the market. This is the perfect time to maximize your value and ensure your business stands out from the pack. But to do so, a proper strategy has to be in place. Remember, poor planning can cost you thousands of dollars – it pays to prepare.
There are many exit strategies to consider – selling to friends or family, selling to an internal party, or selling on the open market.
Each plan of action has its advantages and disadvantages. To speak with a broker on how to plan for your strategic exit, schedule a free consultation today.
Step 4: Find a business broker
The most important thing an owner can do while selling their business is focusing on running their business. A broker uses their expertise and aggressive marketing program to create competition for you, manage prospects, and help you achieve the best price.
More than ever, buyers are looking for profitability and reliable staffing. Currently, we’re facing a staffing crisis, which is affecting business sales. If the seller has good employees and high sales, your business broker can leverage this opportunity and attract thousands of buyers.
No matter the size of your business or industry, a Transworld Advisor is going to be an expert. With the right guidance and advice, you’ll be able to seamlessly sell your business to the right buyer.
Step 5: Qualify potential buyers & negotiate
One of the main reasons a transaction will fall apart is because buyers fail to secure loans after entering into a sales agreement. When you work with a broker, buyers are qualified for financial ability to meet the offer.
That number is reduced, and you’re presented with the best of the buyers. A business broker can also approach and continue to track potential buyers without weakening your position. The best part is brokers will control the information being released, and pre-qualified buyers are required to execute a confidentiality agreement. This will protect you and your company from someone prying through your financials without proper supervision.
When you’re selling a business, especially in a hot market, it’s crucial to negotiate to achieve the best price and terms. With the help of a professional, you’ll be able to avoid confusion during your sales transaction. They’ll be able to identify when a buyer is asking for too little and have your best interest at heart.
Think it’s time to sell your business? Whether you’re ready for that next chapter in your life or interested in earning more cash, Transworld Business Advisors is here to guide you every step of the way.
Get started today and find out how much your business is truly worth with Transworld Business Advisors.