It’s important to consider all the details before deciding to sell your business. The process can be long and costly, as well as emotionally draining. It also involves the transfer of ownership and assets which requires many documents.
In general the size and nature of business will determine if it is sold independently or via the broker. Brokers are typically used to sell smaller companies because their buyer pool is more limited. Selling your business can be a challenging process that requires planning and preparation.
A qualified appraiser will provide a comprehensive appraisal report with documentation to assess the worth of your business. This valuation is usually calculated using the multiplier of annual net income or revenue. This number can differ based on the nature of the business and the industry. It is used to determine the price you will sell your business at.
Make sure you keep your inventory of your equipment up-to-date and ensure that your financial information is accurate before selling. You’ll need to prepare, in the average three years worth of tax returns and financial statements for potential buyers to go through. Preparing these documents can accelerate the process of selling.
During the negotiation phase buyers may request various conditions that can be incorporated into the sale agreement. Salary guarantees, stock payouts or ownership stakes, and other terms are frequently requested. You may want to enlist the help of an accountant or attorney before agreeing to any terms because they can provide a detailed explanation of the implications of these provisions for your profit from the sale.