Are you looking to sell your business yourself or are you going to appoint a business broker? Selling a business can be confusing and very time-consuming. To help make sense of it all, here is 6 ways to get your business ready for sale.
1. Evaluate your business and why you want to sell
It is important to evaluate your business, assess why you want to sell and what makes a buyer consider purchasing your business.
Ask yourself the following questions:
• Why do you want to sell?
• Is it the right time to sell?
• What are the business potentials for growth?
• Who are your customers?
• Can my business succeed without me or without a key customer?
Evaluating your business and why you want to sell will force you to confront any weaknesses as well as underline the strengths and growth potential of the business.
2. Get your paperwork in order
Getting your books in order is extremely important when you considering selling your business.
Prospective buyers will want to examine the financials prior to making any offer. Having your books in order will ensure that the interested buyers are comfortable in buying your business
3. Prepare an Information Memorandum
An Information Memorandum also known as an IM is a sales document provided to interested buyers by the seller or business broker which gives them a detailed overview of the business that is being offered for sale.
When selling a business, this sales document is one of the most important item that should be prepared prior to selling.
The main purpose of the Information Memorandum is to provide valuable information that allow buyers to get a better understanding of the business & its operations.
Based on the Information Memorandum, buyers can decide if the business will suit their needs.
You can write this document yourself, hire a writer or you can appoint a business broker who will most likely prepare this for you.
4. Write a compelling advertisement
A business for sale advertisement that is appealing and professionally written is extremely important if you want buyers to notice your advert and enquire. Spending the extra time writing a well written advertisement for your business will help generate more interest and hopefully secure a buyer.
5. Prepare a Non-Disclosure Agreement for Your Business
A Non-Disclosure Agreement (NDA) is a legal agreement between both parties that outlines confidential material, knowledge, or information that the parties wish to share with one another.
It is a contract through which prospective buyers agree not to disclose any information covered by the agreement. An NDA creates a confidential relationship between both parties, to protect the confidential and proprietary information of the business.
Having a non-disclosure agreement ready for prospective buyers to sign, can also help speed up the selling process.
Get your lawyer to draw up a non-disclosure agreement (NDA) or to provide you with any additional information about this document.
6. Speak to your landlord
When you sell a business that relies on a leased premise, you need to be aware that your landlord has a say in whether the sale withstands or not. In most commercial leases, your landlord must agree to the assignment before the settlement can take effect.
If the business lease has several years remaining, the conversation with the landlord should focus on getting consent to an assignment. However, if the lease has only a year or two remaining, the business may need a new lease for the new buyer, and that is the issue to be discussed with the landlord.
For more information contact Richard Bristoe at Business Sale Writer.