Strategy for Maximum Profit When You Sell Business
When the time comes to sell your business, you should ask yourself the most important question of all; what am I doing to increase its value? More often than not, people sell business only to regret later because they never put in enough time and effort to increase their asset value. To sell business at optimal profit, you must start by increasing its asset value. How do you do this?
Value your business
There is no buyer who will buy a business without first knowing its exact worth. The first step to take is to quantify your company. When doing this, you must consider the assets you wish to include and exclude in the sale. Your risks have to be listed. It is only by doing this that you will be able to determine the actual value of your business. Call in a business valuation expert to help with this step. Getting the actual value of your firm will help know what to focus on to increase value so as to sell business for the maximum profit.
Eliminate worthless debtors and inventory
As you sell business, you need to get rid of the long-term non-payers. You can do this by making them an irresistible offer or simply writing them off. In addition to that, there is nobody that wants to purchase a business that has out-of-date stocks. Get rid of such stocks. By getting rid of debtors and worthless inventories, you will be able to boost the value of your business.
Organize your financial records
Business buyers are after the facts. They will use all manner of questioning to understand your financial standing. The wise thing to do before you sell business is to straighten all your financial records. You should be able to answer every question relating to the reporting end of your company. This will include the balance sheets, liabilities, assets as well as the taxation position. Get these records ready.
Another important thing to do before you sell business is to hire a CPA to audit all your business records. He should include verification, performance as well as confirmation. This evaluation will be both helpful to you and your buyers.
Strengthen your contractual and legal affairs
Buyers will want to know your stand with the law. Is your business legal? Have you ever had problems with the law because of the nature of your business? Are you compliant with the regulations? Which contracts do you have? These are some of the questions you should expect from prospective buyers.
Create department manuals
Some buyers take long to make a decision because of the anxieties of running a business in your absence. In spite of having a management team, it will pay to come up with departmental manuals that cover the basics of each department. This will keep buyers at ease.
Last but not least, before you sell business, get professional help. You will need to hire a business broker San Diego to guide you through the sale process. A corporate lawyer will also come in handy as he will give you legal counsel.