What steps should I take to prepare for the sale of my business?
Selling your small business can be a complex process. It will require that you adequately prepare for the sale, select the right method for the transfer of your business, and determine whether it is the right time to sell. A well prepared and executed sale can bring in tremendous financial rewards. Small business owners should enlist the assistance of an experienced New York business lawyer who will walk you through the steps to listing and achieving a successful sale of your business.
Valuating Your Business
The first step to selling your small business is determining its value. This will better inform your decision to sell and help you to set your asking price. There are several ways to value your business. You can start by looking at the prices at which similar businesses within the industry and area have recently sold for. In the alternative, you can base the price on the value of your business’ assets, which includes the value of its customer base and reputation. These factors are known as the business’ “Goodwill.” Other valuation methods involve looking at the businesss’ annual earnings. Your business law lawyer can assist you in setting a fair sales price for your business.
Getting Your Business in Order
Once you have decided on a purchase price, you will want to get your business in order before it is listed and advertised for sale. Look closely at your business operations and fix any shortcomings you see. You will want to evaluate your corporate books, the condition of the business, any claims against the business, employee practices, and more. You want your business to look and run as smooth as possible before potential new owners consider its purchase.
Selecting a Means of Transferring Your Business
While most owners contemplate an outright sale of their business, there are other options. In an outright sale, your business will be sold entirely and at once to the buyer. Ownership will transfer completely once payment is completed. Alternatively, you can do a gradual sale. In a gradual sale, your day to day operations will be turned over to another person, but you will continue to receive income from the business for a certain period of time. Your business law attorney will assist you in setting the conditions of your sale and selecting the best means of transferring the business for you and the buyer.