When a business owner decides to sell a business there are a number of steps that need to be completed to ensure a successful sale occurs. Here are the steps you should consider when preparing your business for sale.
1. Maximize the value of your business before you put it up for sale. This is a great way to increase the market value of your business net you a much higher price. These projects can be small or large. You must always weigh out the gain over the cost.
2. Determine the value of your business so that you can set your asking price. A business broker or appraiser is someone you should consider investing in. The value of the business is directly related to the number of years the business has been operating, the assets and the condition of those assets, supplies, inventor, facilities, number of employees, earning, and the stability of those earnings.
3. Get tax advice from your attorney. Business taxes can be complicated and they can hinder the sale of your business so know where you stand. Know where you stand before you sell.
4. Advertise your business for sale using tools like the local newspaper or online papers like Craigslist or Kijiji are good sources for advertising. You can also enlist a realtor that specializes in commercial real estate. Make a list of individuals and companies you know may be interested in your business and let them know your business is for sale. This is generally the best way to get qualified buyers looking at your business.
5. Once your find a buyer for your business you will need to create a written sale agreement. It is highly recommended you involve the assistance of your attorney since this will be a legal and binding contract. This document will include the buying agreement, the payment structure, the costs each party will bear, the lists of the assets that will go with the company, etc. This agreement provides a written record of the key factors of the deal as well as the term and conditions.
6. Your accountant will need to close off your books.
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We need to mention the importance of due diligence when selling your business. It covers the following areas of your business.
1. Previous sales and forecasted growth
2. Valuation of business assets
3. Legal Issues
4. Customers of the business
5. Any legal action against the building in the past
6. Intellectual property rights
Once the sale is finalized, you will have no further ties to the business.
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