4 Things to Consider When Selling Your Business

business for sale W8Selling your business to another party or company is a lot more than closing down your office and terminating utilities. You have a lot of paperwork, tasks and most importantly, considerations to make. Selling your business is a big step and doing it wrong could leave you with some serious regrets.  So, before you even put your business on the market, consider these four things first.

What is the Value of Your Business?
You have a personal connection to your business, but that does not play a role in valuation. Before you can sell your business, you need to have a good understanding of how much it is worth and what you can reasonably sell it for. If your annual revenue is below $5 million, most buyers will want to pay $5,000 to $7,500 for the company. Most business owners are shocked to see how little they get for their business. Therefore, meet with a valuation expert first before you list.

Meet with a CPA
There are a lot of financial and tax considerations to keep in mind when selling your business. It is best to meet with a CPA to clean up your financial records, organize records, and get all of your taxes taken care of. Your buyer will need your corporate and financial records as part of the purchase; therefore, a CPA can help you create a clean bookkeeping package to hand over.

Create a Contract
Selling a business is a legal process. Not only should you have an attorney, but you should hire a business contract lawyer to draft all of the agreements and sales contracts. An inadequate sales contract could leave you liable years after you have sold the business or worse, make you end up paying out-of-pocket rather than receiving a profit for the sale.

A business contract lawyer will make sure your best interests are kept in the forefront during the sale process. They can also help you with any sales negotiations – ensuring you get the most out of your sale.

Notify Your Customers of the Change
While you may be ready to get rid of the business, you still have customers who have been loyal. Keep them in mind and let them know about the upcoming changes. Put them in touch with the company or individual buying the business so that they are aware of the transition.

 

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