It is crucial to take into consideration all the factors when deciding to sell your business. The process can be long, expensive and emotionally challenging. It also involves the transfer and ownership of how to sell business assets which require lots of documentation.
Generally speaking, the size of the company determines whether it is sold as an independent company or through a broker. Smaller businesses are often sold through brokers since they are more restricted in their buyers. Regardless of the size of your company, selling can be a complex process that requires careful planning and preparation.
An appraiser with experience can provide a comprehensive appraisal report that includes evidence to assess the worth of your business. The valuation is usually dependent on a multiplier of the annual net income or revenue. This number will vary by the type of business and industry, and is the base for determining the selling price.
Before selling, ensure that your financial information is in order and that your inventory of equipment is up-to-date. You’ll have to prepare, generally, three years of financial statements and tax returns for a potential buyer to review. Being prepared with these documents can speed up the selling process.
During the negotiation phase buyers can request a variety of conditions to be attached to the sale agreement. Salary guarantees, stock payouts as well as ownership stakes and other terms are frequently requested. Before committing to any contract, you may want to consult an accountant or lawyer to clarify how the clauses will impact your earnings.