how to sell a business considering selling a business in the next year or two will want to start preparing now. Selling a commercial property is not like selling a home. Owners cannot simply paint the building and expect it to sell. Buyers will be looking for specific components before spending any money on a new business venture.
A buyer will be interested in a business that can remain competitive when the owner leaves. If you are the one person who knows everything, the business will not be attractive. Begin to develop leadership positions among current staff. Department managers, for example, need to learn about the other departments in the business and work collaboratively.
A strong team that can problem solve, be creative, and make sure the business runs smoothly will add value to the business. Update job descriptions, policies and procedures, and vendor lists for inventory. Gather the most recent inspections from any oversight agencies, proof of compliance with health and safety regulations, and service contracts for maintenance. Information that is organized and ready for review will impress a buyer.
Detailed records regarding financial information for the business are critical. Those should include tax returns, quarterly reports, profit and loss statements, payroll information, any balances due or owed to the business, and a complete list of assets and expenses. Sell off any unused equipment, vehicles, or furniture that belongs to the business. This will improve cash flow and reduce overhead costs.
Consult a Business Broker
It is wise to make an appointment at least one year before the anticipated sale. There are a few reasons for this. The first is that the broker will know the current commercial marketing trends and can provide a realistic estimate of market time.
Brokers can visit the business, assess the aesthetics, and recommend changes to boost the appearance and asking price of the business. This is where that paint may be needed. Some businesses may just need some minor improvements, while others may require remodeling to reach industry standards and buyer expectations.
Another reason is brokers are skilled at business valuation. Hundreds of variables, tangible and intangible, contribute to the overall value of any business. Arriving at an asking price and being able to support it will make a substantial difference in the financial gain of the owner. Commercial selling is a full time job and owners already have full time jobs. Contact an experienced broker when thinking about selling the business.