Steps to selling your business
While each company is unique, the process of selling one doesn’t tend to vary too much – although depending on the type of organization you own, there may be slight differences. In most instances, familiarizing yourself with everything that needs to be done can be a great way to ensure that you get the most out of the trade, This is why taking the time to learn the different steps of the process can be ideal for almost anyone in this position.
Step 1: Get the help you need to make the most of the sale
Even the best businessperson should wait before diving inand trying to sell their company – as there are a variety of things that need to be carefully considered. One of those things is picking a good selling team, which will often need to include a solicitor and a business transfer agent.You should let your accountant know about your plans to sell, since they can get the necessary documents ready.
This can be crucial to the success of a sale and the amount that you can earn from the trade, so it’s typically worth it to put together the best team you can.
Along with choosing the right people, it’s important to get a realistic evaluation of your enterprise. After all, transfer agents will generally explain why the company is worth the cost to those who may be interested in purchasing. Setting your goals too high is likely to turn entrepreneurs away, and while a lower price could attract many potential buyers, it could also cost you money that you deserve.
There are a number of things that can contribute to an accurate evaluation, such as:
- Cash flow
- Gross sales
- Overall success of the business
- Recent sale prices
Step 2: Moving to the market
Once you think you have a fair value and feel ready to sell, the next stage of the process is to move to the market – and this is where the efforts of a transfer agent can really come in handy. They’ll take some of the key features and pieces of information about your company to create the most appealing sales pitch possible. While the services can vary from one team of experts to another, the methods will often have the same outcome (as long as you hire a professional, that is).
This is a big step for anyone in this position to take, as this is the point where the idea of selling begins to come to life.
Step 3: Communicate with the people who are interested
Putting your organization up for sale isn’t always the simplest of choices, and it requires a lot of time and consideration to determine whether it’s the right move. It’s often the same for buyers too, since they’ll be making a large investment with no way to know for sure that they’re going to benefit from the transaction. This is why it’s important to be open and present during the process.
You should also have all the information that will be needed too, as this can help to reassure a person who’s interested in buying (since they’re likely to want to know that the company matches the value). It’s important that prospective buyers aren’t suspicious about anything, so remember that honesty and willingness to cooperate is often a vital part of most sales.
Step 4: Making negotiations
Regardless of how interested the buyer is in your business, you’ll typically need to negotiate to get the right price. This isn’t always the easiest part of the sale. In fact, many sellers find it hard to stay patient while waiting for a deal to be made, especially if the price goes lower than they expected. If you feel like it’s not worthwhile it could be best to move on, although it’s often wise to carefully consider your options.
The experience and skills of your agent are likely to be valuable in this part of the process too, as they can help to find a deal that everyone’s happy with – and while it is necessary to make sure that both parties are comfortable, remember that they are working for you.
Step 5: The last stage – closing the deal
When the price is finally settled on and both of you are willing to make the transaction, a binding contract will need to be signed by both parties (as well as their involved solicitors). At this point, the trade has been made and the money is essentially yours.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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