When you begin to think about selling your business and are wondering how much your company is worth, it can seem overwhelming! Where should you start? What will you need to be ready for? How do you sell a business? So we’ve prepared a brief cheat sheet of the first few steps you can take towards your business exit.
Build Your Professional Team. There are three important professionals best equipped to help you sell your business and complete your business exit. These professionals are a wealth manager or financial planner, a transactional advisor or business broker, and a transactional attorney. A wealth manager knows your personal financial situation well and can assist you with planning for the tax implications of a business sale. A business broker will explain how to sell a business and guide you through the entire business exit process from providing advice on how much your business is worrth and developing a price opinion to marketing to buyers, and getting you to the closing table. Finally, a transactional attorney can support you with the legal aspects of the sale and contract execution.
Accessible and Clean Books & Records. Making sure your books and records are in order is key to planning for your business exit. You will need to share 2-3 years of tax returns, profit & loss statements, and balance sheets to develop the market value of your company at the start of the process. And at the end of the process accessible and clean documentation will come in handy during due diligence, which is essentially a discovery phase for the buyer of your business prior to the execution of the purchase agreement. If this is an area you need help with, we highly suggest hiring an accountant to clean up your books and records and get your business to a more manageable place.
Remove Yourself from Operations. It may be hard to consider your business without the central role you play as the owner, but as you plan for your exit, this is exactly what you need to do. A business buyer will be much more attracted to a business that does not rely on the previous owner managing its daily operation. Taking a step back, training a manager, and focusing on strategic initiatives will position your business for an optimal return on investment.
Wiyh 40+ years of experience at our back, Transworld knows how to sell your company, and these three steps are a great way to get ready for a business exit. Selling a business is a process - a manageable one, especially with the help of the right professionals! If you are interested in learning how to sell your business with an experienced broker, we invite you to schedule a free consultation or visit our website for more information.
Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!