While an accountant is the expert when it comes to selling a business, in order for a sale to be successful, it will require a great deal of time and input from you, the business owner.
In particular, when selling your business you need to be well prepared for all the different stages it involves, such as how to find a buyer, dealing with documents and how to handle the profit.
See below for the top considerations you need to bear in mind before selling your business:
Reasons for the sale
One of the first questions a potential buyer will ask is why you have decided to sell your business. The most common reasons are:
- partnership disputes
- feeling overworked
It can be harder to attract buyers if you are selling your business due to lack of profits, but there are many attributes that can make up for this, including income figures, a strong customer base and any major contracts that span several years.
Get your timing right
You need to prepare for a sale of your business as early as possible. This will give you time to improve your business structure, customer base or financial records to make the business more profitable and more attractive to potential buyers.
Before putting a business up for sale you will need to determine its worth – making sure not to price it too high or too low. An accountant can help with this.
Prepare your documents
Gather your financial records and tax returns from the past three to four years and review these with an accountant. You should also consider developing a list of all the equipment that is sold with the business and draw up a list of contacts related to supplies and sales transactions. If you have a lease make sure you have the paperwork for this too, while your accountant will also focus on making sure your documents provide a summary of how the business operates.
Finding a buyer
A business sale is no quick-fix. Typically they take between six months and two years so finding the right buyer can be a challenge. Make sure you get a couple of potential buyers and keep in contact with all in case one particular deal falls through. Allow room for negotiation and be sure to put any agreements in writing.
Handling the profits
The best course of action is to make a plan for your financial goals which will help you decide how to use the profits. An accountant will help to identify any tax consequences of securing a large amount of money and can advise on investment opportunities.