New Year’s resolutions are inspiring – they are a great way to start the new year on the right foot. Whether you are looking to get healthier or fitter, more educated or cultured, setting up personal goals is never a bad idea. That said, you can do the same for your business. As an entrepreneur or business owner, your 2020 goal might be to sell your business. If that is the case, consider these five steps to prepare your business for sale this year.
1. Organize Your Financials
The first and most important step to preparing your business for a sale is to organize your financial statements. During this moment, it is important to sit with your accountant and compile your balance sheet, cash flow statement, profit and loss statement, tax returns for the last 2-3 years, insurance policies, lease agreements, etc. This step is vital to complete before you can even begin to think about the second one.
2. Determine Your Business’s Worth
There are numerous ways to value your business. The number you eventually reach will have everything to do with the size and type of business you own. That said, you will need to meet with a business appraiser with all of your recently compiled and organized financial statements. They will often multiply your earnings by some predetermined number and help you reach an appropriate listing price.
3. Tidy Up the Place for Potential Buyers
The next step is very important because once your business is listed, you will begin to get offers and inquiries. When this happens, you want and need your business to look its best – both physically and in the books. This can be done by having those financial statements nice and organized, as well as literally cleaning up your storefront, restaurant, or office. If something needs repairing or old inventory needs removing, now is a great time to do just that.
4. Increase the Value of Your Business
Next, it is very important to find ways to increase revenue. This will ultimately increase the value of your business and make it more attractive to buyers. A potential buyer will be very interested in a business that is strong and has signs of remaining profitable even after there is a shift in ownership.
5. Meet with a Transworld Houston Business Broker
Finally, and arguably most importantly, meet with a business broker. This step can actually be done as early as step one, depending on the amount of guidance you would like during the process. Transworld’s knowledgeable advisors can help you with business valuations, listings, and sifting through potential buyers to find the right ones. With years of expertise, a business broker can save you time and money, which is incredibly important as you are trying to run your business while also trying to sell it.
Don’t let the new year’s excitement take away from your focus on your goals for 2020. If this is the year to sell your business, these steps can help ensure a successful (and quick) sale. When you’re ready, your local business advisors at Transworld Business Advisors Houston is ready to walk through the process with you. Our goal is to help you see your resolution conquered. Let’s start the conversation!