Sell Business - Key Steps to Selling A Business

Annually, over 700,000 businesses are sold in the United States alone. Most are small and mid-sized businesses. Though selling a business is a common thing, not every seller gets to enjoy their firm’s full worth. Some end up being taken advantage of while others manage to sell their business for more than the actual value. The latter is more attractive, right? To sell business at a profit, it is critical that you involve the right professionals and follow the right steps.

Determine a price range

The first thing you need to do once you decide to sell business is to get a realistic price range. If the range is too high, you might never get a buyer and if it is too low, you will risk selling it at the bargain basement discount. Pricing your business is both an art as well as a science. There are many business valuation methods you can use. However, for the most accurate figures, work with a valuator or with experienced business brokers.

Look at the tax consequences

When you sell business, the money you get for it will be taxed. It is important to know how much you will be taxed and look for possible ways to mitigate the tax bite. Work with a tax expert. There are two main factors that will affect your tax bill:

The legal setup of your business (LLC or corporation)
If you are selling the entity or assets

Taxes can be quite complicated. Work hand in hand with an experienced business broker San Diego when you sell your business.

Prepare for sale

Just like selling a house, you need to make your business attractive to buyers. Make everything both orderly and attractive. Reducing your liabilities will also help. Clear all outstanding loans if you can.

Find buyers

If your brand is well known, it will be easy to sell business. Word will get out. However, if you are not well known, you have to advertise yourself. You will need to put ads in the newspaper, trade publications, and business sale websites and so on. Working with business brokers will also be perfect.

Negotiate

Once the word is out and your business is attractive enough, you will receive many deals. The wise thing is not to commit to the first offer you get. Take as many offers as you can. You should then come up with the terms of the sale and start negotiating.

Sign sales agreement

Your terms of sale have to be put in writing. The terms should list all your assets and the value for the assets. This information will be used in taxation.

Plan for closing

When planning for closing, you need to make a checklist of all the things you will need to sell business. They include:

Asset allocation statement
Alarm codes, safe combinations and computer access codes
Cashier’s check
Employment contracts
Customer lists
Supplier lists
Security agreement
Statement regarding the absence of creditors
And so on

File with IRS

The last step you will have to take to sell business is to file the paperwork with the revenue services.

What Client’s Say

We Couldn’t Be Happier

"When we thought about selling we had no idea what our business was worth or how to go about selling. What you were able to do was to cut through the fog so that we understood the valuation issue and had a comfort level with the process. As you know we ended up selling for somewhat more than the original valuation and we got all cash and our CPA loved the way our tax liability was minimized. We couldn’t be happier!"

Over $250,000 More

"Our first contact with you shocked us when you suggested that we wait 18 months before selling because you believed that if we hit our projections that the value would be significantly greater. As it turned out we not only followed your advice but also got slightly over $250,000 more than we originally had hoped for. It is seldom that we have had the opportunity to deal with a firm that doesn’t want both money and a commitment NOW. It was clear and obvious that you had our best interests at heart."

You Got the Valuation We Agreed On

"You did a great job on the sale of our business in really beating the bushes for buyers, including a UK company that was an active suitor. You managed to get the valuation that we had all agreed upon and got it substantially all in cash and got the transaction closed with little to no problems or expensive lawyers involved."

Thank You for Handling Our Business

"Our business was smaller than what your firm normally handles but it was a BIG part of our net worth and savings. Thank you for handling our business and we were very pleased and delighted with the results."

More Than Anticipated

"Our transaction was involved as we had different corporate entities located in different states. Our only regret is that we didn’t retain your services before 2012 when we paid $25,000 to a firm in Texas that did a valuation and market analysis for us before then failing to do anything in the way of trying to sell our business. You got it sold for more than anticipated."

The Sales Process