by Kelly Deis of SoundPoint Consulting
The ideal time to start preparing to sell is two years before the date you hope to sell by, says Curtis Kroeker, general manager of BizBuySell. The more advance preparation, the better. Even if you don’t plan that far ahead, there are several steps you should take before putting your business on the market.
Get your house in order. “The most important thing to do is to make sure your business is performing as well as it can,” Kroeker says. Now is the time to assess your cash flow, your expenditures, your tax strategy and other elements of your operation to see whether they are optimal.
Consider the timing. It’s always easier to sell a business when it’s on the upswing. For this reason, owners of seasonal businesses should look to sell soon after their busy season begins, Kroeker says. Plan ahead and you won’t find yourself desperate to sell during a slump.
Consult with experts. There’s no shame in seeking expert assistance. If structuring the sale in a tax-friendly manner, setting a price or other parts of the process are too much for you, consult your accountant and consider getting a business broker to handle the sale. That way you can focus on doing what you do best: running your business.
Show buyers a bright future. “When a buyer buys a business, primarily the focus is going to be on the proven track record,” Kroeker says, “but there is also the future potential [to consider].” He recommends putting together a growth strategy to show potential buyers. One of your greatest assets as a small-business owner is your intimate knowledge of your own operation; use that to point out opportunities for the new owner to expand the business. The few days’ work it requires may pay dividends in a sale.
Have you ever heard of it? Well, if you are thinking of selling your business in the next few years, it is a term that you should get familiar with.
