Some people quite literally start a business with the intention of selling it to someone else eventually. The idea is that if they create a profitable organization, other companies may want the talent, market share or resources they accumulate. Others might reach the conclusion that they want to sell a business because they are ready to retire, face medical challenges or have a different professional opportunity.
Any sizeable transaction requires careful preparation. Otherwise, the sale may not be as beneficial as it otherwise might be. How can a business owner prepare their small company or professional practice for sale to a new owner?
The process starts with a thorough review
Preparing a business for sale requires a careful analysis of the organization’s current status. The owner needs to look at the assets the business has, the contracts it has negotiated and other important considerations, such as the volume of business the company performs and the talent that helps run the company.
Debts that the organization owes and obligations to other parties can also influence the best approach to a business sale transaction. The owner can potentially identify issues that could deter prospective buyers or undermine the final sale price of the business. Taking the time to address liabilities before actually listing the business for sale can help maximize the return on the long-term investment the owner has made in the company.
Sellers can help support prospective buyers
There are several ways for a business owner to broaden the pool of potential buyers and to take some of the risk out of seeking an ownership interest in their business. A common way for the current owner to act in the best interests of the buyer is to offer transition support.
Even someone who has experience managing a business or working in the same industry may have a lengthy adjustment period when they assume control over the company. By agreeing to stay on to offer training and other forms of support, the current owner can take some of the pressure off of the new owner. People may stay in a full-time or part-time capacity for anywhere from a month to a year after a business transaction.
Handling small details before a business sale transaction can increase a company’s final sale price and may limit the possibility of the business failing after its transition to new ownership. Business owners who are fastidious as they prepare to list a business for sale can potentially increase their chances of benefitting from favorable sales terms.