Preparing to Sell a Small Business

The sale of small businesses is on the up, so if you’re considering selling, then there really is no time like the present to start the ball rolling. As with most things, selling a small business takes time, often up to two years or so, and there is a great deal of preparation involved in making sure everything is up to scratch before you even consider putting it on the market.

When it comes down to it, tidying up all the little odds and ends can seem such a daunting task, and it’s often difficult to know where to begin. Putting together an exit strategy is a positive first step, and it means that you can tick off each thing as you go along. It is useful to keep on top of what you have and haven’t done, especially if the process is going to take you a year or two. Here are some key things to consider when putting together your strategy.

What is Your Ultimate Goal?

There are a few key factors you need to decide upon before you even begin to make any other plans. The first is what your timescale is for making a sale. This is extremely important as being impatient and opting for the quick sale route could lose you money and could potentially mean you miss important information when getting everything ready for the sale. The second is to do a little research and find out the current market conditions and whether or not selling your business would even be viable at this point in time. Finally, you must ask yourself, what would you like to achieve moneywise. Once you’ve answered these questions, you can then begin to answer the question of how and what you will do to get there.

Check the Market Trends

There are important things, beyond your control, that you must check, as they can determine whether your small business is likely to sell or not:

• Is the current financial climate in a good place?
• What are the current market trends?
• Who are my potential buyers?

Once you have answered these questions and established the relevant information you need, then you will have a clearer idea of whether or not now is the best time for you to start the sales process. Remember it can take time to sell a business and you should recognise this when making your decision.

Ensure Your Accounts are in Order

Although it can seem like a mammoth task, unless you are lucky enough to have an accountant, then you’re going to have to take a stab at those accounts yourself. Hopefully you will have spent a little times over the years ensuring that they are in order, and if so, then this will be a much less painful task then you might think. Once you’re on top of your accounts and have everything filed in a clear, easy to understand manner, then you can begin to look through and find the following information:

• Profit-wise, how much on average is your company currently taking?
• What do you predict your future earnings to be, based on the above?
• Do you have any potential risks? If so, how do you plan to abolish these?

Have Patience

It is said that good things come to those who wait, and this is certainly the case when selling a business. Two years might seem like a long time coming, but in the grand scheme of things it’s nothing. Have patience from start to finish and the end results are guaranteed to be a lot more positive than if you rush.

These are just a few key pointers to help you to sell your business, but there are plenty of other things to think about. Once you’ve put together a plan to cover the important starting points, then asking for further advice from companies such as Axis Partnership is a great port of call, and many offer a free business valuation which can open your eyes to both your strengths and weaknesses and help you to change them.