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Make New Year's Resolution to Prepare Your Business for Sale

As the year draws to a close, it is time to consider resolutions for the upcoming New Year. Are you thinking about selling your business? In a city like Seattle, you will require thoughtful preparation of all contracts and financials in your business. A decisive resolution to get prepared might be the motivation you need.

Being well-prepared will position your business in the market and attract qualified buyers. This article will dive deeper into how to foolproof your business for a successful sale.

Develop Your Strategy: Set Timelines & Hire a Sales Team

A strategic plan is essential to ensure a successful sales process and maximize the return on your investment;

● Following a strategic plan eliminates hiccups in the selling process.
● Set specific timelines to create accountability for completing tasks that prepare your business for sale.
● Hire a sales team who stand shoulder to shoulder with you to sell the business and exit the industry successfully.

To get off to a great start, here's how strategy, timeline, and advisors will help you:

Audit Your Business: Identify Risk, Analyze Strengths & Weaknesses

An audit will identify areas that require improvement to mitigate risk. Conduct the assessments to gauge overall performance across all departments.

The assessment includes:

● Analyzing past financial records,
● Examine marketing strategies,
● Review customer service policies,
● Review staff capabilities,
● Production output and
● Identifying potential growth

You can ensure that your business runs as efficiently as possible by evaluating strengths and weaknesses. Consider competitive markets and how technological changes or improved regulations affect operations over time. These steps will maximize your business's value before entering the market.

Analyze the Market: Use Data

Data is essential in making informed decisions about how and when to sell your business. Data can help you understand current trends in the industry, such as average sale prices, potential buyers, and buyer behavior. It will also help you understand the value of your business. The information gathered can provide valuable insight into what potential buyers in Seattle may be willing to pay for your business.

When it comes time to negotiate, you certainly don't want to be groping in the dark. Understanding current market conditions will give you an advantage when negotiating the sale price and terms with prospective buyers. By researching and understanding the available data, you can make an informed decision that maximizes your negotiation power and Return on Investment (ROI).

Determine the Value: Get Professional Help

A professional valuation will determine the fair value of your business and maximize its sale ability. Many factors are considered in an accurate valuation, including;

● Profitability and cash flow analysis,
● Market demand and pricing trends,
● Legal considerations such as labor laws and regulations,
● Access to financing,
● Tax implications and the tax status of your business,
● Geographical location,
● Potential for expansion, and
● The nature of your industry & its future potential in the overall market

A comprehensive valuation report will enable you to set a realistic price and attract the best possible customers. You can also use this report to negotiate with your buyer and get the most out of your deal.

Document the Process: Gather Necessary Information

Approaching the negotiation table without necessary paperwork leaves the sale price vulnerable to an argument that lowers the sale price. When you have verifiable financials and documentation to support the valuation, you eliminate the opportunity for debate over value.

The documentation task includes obtaining up-to-date financial statements such as balance sheets, income statements, and cash flow reports. Also, you may need to collect tax returns for at least three years before the sale date. Compile inventory lists that detail all assets (including intellectual assets such as patents, copyrights, etc.) associated with the business, such as furniture, equipment, and vehicles.

In due diligence, a potential buyer may also request access to contracts or agreements between you and stakeholders such as suppliers or customers.

Manage Finances: Minimize Tax Implications

One key factor in maximizing the sale price is understanding how to manage finances and minimize tax implications. Tax implications can significantly impact how much money you get from selling your business. Before listing, review all relevant tax laws and regulations related to selling a business to ensure that you are doing everything correctly and legally.

Market Your Business: Identify Potential Buyers

The first step in this process is determining who would be most interested in what you offer. Typical target audiences include private investors, venture capitalists, and corporate entities such as large public companies or competitors looking to expand their portfolios. Researching each type of buyer can give you an idea of choosing the channels to reach them.

Conclusion

When you develop a strategy and take the time to prepare your business for sale, you are part way to a successful sale. To clench the deal, hire First Choice Business Brokers. We have the team of professionals you need to realize the success of your New Year's Resolution in 2023.