How do you know if it’s time to sell your small business? This can be an exciting time, but also a scary one if you don’t know how to go about selling it in the most profitable way possible. Here are five steps you can take to ensure that your business gets into the right hands and fetches the biggest price tag possible when you decide to sell it.
Why Sell Now?
If you’re thinking about selling your business, here are a few reasons why you might do so. First, it may be time. If your business has passed its peak and is struggling, or if your best years have been and gone, then now may be a good time to sell up and get out while you can still make a decent profit.
Also consider: Have you lost interest in running your company? Do you want more time with friends and family? Are there other opportunities that demand more of your attention? Or perhaps you just don’t feel as passionate about what you do anymore. These are all perfectly valid reasons for wanting to sell up, but remember that if you choose to sell, you will lose an important part of yourself—your business. So before making any decisions, think long and hard about whether selling is really right for you.
Finding an Expert
An important step in selling your small business is hiring an expert. Selling a business is a complex process that requires knowledge of tax law, market conditions and valuation. Many people simply hire professionals who already know what they’re doing to avoid getting cheated. If you don’t have experience with these types of transactions, then it may be worth looking into finding someone who does. This will help ensure you get top dollar for your company and make sure you don’t miss any critical steps along the way.
The Financial Valuation Process
A financial advisor or CPA will look at three types of value: contributory value, investment value and potential income. Contributory value refers to tangible things that can be sold off—like machinery or equipment. Investment value is a little harder to put a finger on; it’s essentially what someone might pay for goodwill, market position and customer base—all things an entrepreneur has built up over time. Customer base on its own is difficult to pin down especially in service businesses, customers can choose to go elsewhere, but a calendar full of regular repeat clients for the next 12 months will be interesting to a potential buyer if the handover is handled well. (Make sure you are utilizing Savvy’s repeat appointments and payment plans to put yourself in a great position).
What If No One Buys it?
If you’re planning on selling your business, there’s a chance that no one will want to buy it. Many small businesses fail, and few go on to be big enough successes that they are worth buying. That doesn’t mean you shouldn’t sell it if that happens; instead, just realize what value you can get from your product or service in other ways besides selling it. For example, maybe you could try to license out your business so someone else can take over it while still keeping some of its value as yours. Or maybe you could open up a franchise of sorts—you might not make as much money as you would have by selling outright, but at least someone else is doing all of the work!
Closing the Deal with Confidence
There are no guarantees in business, but if you’ve done your homework, presented a viable plan, and shown that you’re committed to making things work, then you should be able to enter into negotiations with a greater sense of confidence. A fully utilized Savvy system will give you everything you need to show your potential future buyers a full history or your business, a strong customer base, a full diary booked out a year ahead, a strong set of business reports showing good revenue, repeat clients and profitable revenue per service will all help to sell your business. Even if you aren’t planning on going anywhere for many years, plan now for that time when you will want to hand over the reins and use Savvy to give you a strong benchmark and business to sell. Sign up for your free trial today! https://savvypetspa.com/landing