Selling your business will likely be one of the largest financial events in your life, so it's vitally important that you are properly prepared when selling your business. For many business owners, the thought of selling the business they have grown and operated can be emotional and challenging.
To aid in this important and critical time in your life, Travis Kellett, Broker at Bridgepoint Business Brokers has prepared this summary of key factors for business owners to consider when contemplating the sale of their business.
What is my business worth?
When buyers consider an investment opportunity they are typically most concerned with the cash flow the business generates, the value of the assets used in the business, and the amount of owner benefits.
At this stage, it is extremely important to understand the true cash flow of the business. A business broker takes the time to interview the ownership group, and recasts the financial statements to depict the true cash flow of the business available to a potential buyer.
Who can help me sell my business?
Business owners will need tax, accounting, and legal support during the sale, as well as a qualified business broker to market the business.
It cannot be emphasized enough, that the successful sale of a business relies on a carefully executed marketing plan that protects the confidentiality requirements set out by the owner. This is where a business broker can offer clear value - by finding interested parties that are truly interested in your business, and have been vetted and demonstrate the capacity to close the deal.
A business broker can alleviate significant stress involved with the sale of your business as their role is to manage the entire sales process and find the right buyer for your business.
Is confidentiality important throughout the sales process?
Trust and confidentiality form the foundation of all successful business transitions. The leakage of the pending sale could create uneasiness among suppliers, customers and staff.
A business broker will only disclose information about your business to prospective buyers that are pre-qualified, including the completion of a signed non-disclosure agreement. This ensures that the only people who will receive details about your business have been verified for their financial and managerial capacity and are qualified to purchase your business.