5 Things to Remember When Preparing Your Business for Sale

October 2022

If you're a business owner who wants to retire or move on to other ventures, selling your business may be your best option. But selling for the right price can be a challenge. Your best sales strategy will include starting the process early with 2-5 years of verifiable data.  

As a well-established, successful agency serving the San Diego area, First Choice Business Brokers makes the process simple for you.

With our team of specialists, we; prepare, market, list, and find buyers for your business, then negotiate and close the deal. Consider

1. Determine Your Business Valuation; what are you worth?

Every owner wants to know the value of their business, but finding actual value is not a straightforward process. You begin by choosing a valuation method and then collect the data -tangible and intangible assets, financial statements, profit margins, and taxation, needed for the selected valuation tool. If this is not your area of expertise, you may quickly become overwhelmed.

An accurate valuation is essential to the sales process. It helps categorize the unique aspects and attracts qualified buyers. When you meet buyer expectations, the company will sell quickly with the best results. An accurate valuation is well worth the attention of experts.

First Choice Business Brokers - San Diego combines the best valuation tools with proven success over the past four decades.

2. Analyze Your Company's Market Position; where do you stand?

Once you have a valuation, you can establish a position within the current market to understand the competitors in your niche and how your revenue stacks up against them.

If you are willing to pay a fee, you can utilize websites with reasonably accurate numbers about business earnings and profit margins. You can talk to other business owners in your niche to get ideas about how your business compares to theirs. Putting all these together can give you a good idea about where your business stands. The results online and chatting with competitors may not be reliable sources, and the information may be inaccurate.

First Choice Business Brokers - San Diego has access to reliable and accurate data to position your business and achieve the best results and a successful sale.

3.Create A List Of Potential Buyers; who will buy your business?

When selling a business, you need a buyer. Don't limit your options to a single buyer. Having a list of qualified potential buyers creates a competitive sales environment and allows you to choose the best buyer offering the best deal. So who is the ideal buyer for your business?

●      What financial situation works best for you, and does the buyer qualify?

●      What qualifications are required?

●      Do they have the necessary experience to be successful? 

●      Are you willing to help the buyer with a training period?

Create your ideal buyer, then find a match. It sounds simple, but finding leads that align with your needs can be challenging. 

You can connect with our team at First Choice Business Brokers - San Diego. With access to our vast buyer network, we make it simple for you to find the right buyer to purchase your business.

4. Ensure Your Documentation Is Verified; are you transparent?

A qualified buyer will investigate and verify every fact and figure you present and ask for more. The buyer will focus intently on their due diligence process, and you can be sure they spend the time and money to hire experts who review all data and look for risks and liabilities.

The process of due diligence can be uncomfortable for an unprepared owner. Having to scramble for information the buyer requests or denying their requests will quickly devalue or even derail the sale when the buyer lowballs an offer. Missing or inaccurate information may cause legal issues in the future, costing you time, money, and stress.

Alternatively, being well-prepared and transparent will attract a good buyer and maximize your value when you use the metrics to support your asking price in negotiations. 

FCBB-San Diego has access to professionals you require who audit your documentation and prepare an attractive package for the sales process. A good buyer appreciates an objective audit. Lawyers, accountants, bankers, taxation experts, real estate and insurance brokers make sure the process is fair, legal and all information is verified.

5. Take Steps To Enhance Existing Value; fair pay for hard work.

By the time you are ready to sell your business, you are in the last stages of its life cycle:

●      Getting Started, you bought an existing business or started from the ground up.

●      Get Growing; you worked hard to make ends meet and expand opportunities.

●      Maximize value; this is where you are at now. It's not time to slow down yet!

●      Sell; you want to realize your success and profit from your hard work.

Once the business is listed for sale, an owner may think their work is finished. But this is far from the truth. An owner needs to add value wherever possible until a business is sold. If you want to sell your business for top dollar, focus on making your business attractive to potential buyers.

Audit your business to determine areas of risk or liability and make improvements. If your business is doing well, look at how buyers will see its value. Avoid making risky decisions that may affect your business negatively. Explore improvements that enhance the existing structure and modernize it to align with current trends.

First Choice Business Brokers-San Diego team focuses on providing you with the best value. An improved USP (Unique Selling Proposition) suited to your potential buyers can work wonders.

FCBB-San Diego offers a team of positive motivated advisors who simplify the sales process so you can get on with your next adventure.

We are here for you! We have great relationships with businesses in the area and we can deliver the same to you. Drop a line on our email, or call to get started with a consultation.