Is It Time to Sell the Business?

They oftentimes say that you have to strike while the fire is hot.

With that being the case, when is the right time for a small business owner to put their company up for sale? Should they sell when the economy is good in hopes of getting a better price for the product they offer or is a struggling economy a better time to sell in hopes of less competition for their product?

The first step for any small business owner is to do their homework and not be rushed into a sale.

Careful Planning Key to Not Losing Your Lunch

Just as when they were planning to start a small business, selling a small business involves careful planning, good timing, and taking all the lessons learned as a business owner and applying them to the sale.

So what are some tips should you consider selling your small business? Among the situations to avoid finding yourself in include:

● Not making the needed preparation;
● Taking the very first offer and missing out on potentially better propositions;
● Waiting  too late to sell and getting stuck with a less than stellar offer;
● Not having a proper buyer-seller deal in place.

As mentioned earlier, timing is critical to making sure that the potential sale comes off without a major hitch. If your timing is off, you could find yourself not getting the desired return on your investment.

Your timing in selling your small business can be impacted by both internal and external factors, such as whether or not you are dealing with a personal matter and finding yourself in a hurry to sell in dealing with an unstable economy that is out of your control.

Before you can contemplate selling your small business, make sure to do the following:

• Get all your records together from when you started the business (assuming you have not been in business for long) or within the last few years (if you have been in business for some time now);
• Table all your assets and liabilities related to your business so you know what to expect when it comes to an asking price and what you may get in return;
• If you’re dealing with employees, consider how a potential sale will impact them. Will they be included in the sale to a new owner? Will they be out of work should you sell the business? Some sales are predicated along the lines that the current employees will transfer over to the new buyer and be employed for a set amount of time before the new owner could decide their fate;
• Decide what your next move will be should the business sell. Some small business owners sell their business and stay on in some capacity with the new ownership, others go off to start a new business venture, while still others decide to retire;
• Should your plan be to retire, will you consider working part-time under the new ownership? Some business owners end up staying on as consultants and/or working part-time when the new ownership is on board;
• Lastly, make sure selling the business is what you truly want to do. Remember, once you’ve sold the business that’s that. If you’re feeling a little burnt out from running the business, consider taking a little time off and see if that helps re-energize you. You also have to factor the economy into play, what tax advantages or disadvantages may be in play should you sell, and how no longer having a business will impact you.

Selling one’s small business comes with many feelings of anxiety, excitement, sadness and even some relief.

Should you be considering selling your small business, above all else make sure you think the sale through so that you do not make it your business weeks, months and years later regretting it.