Selling a small business is a major decision, often just as impactful as starting one. Whether you're considering retirement, navigating a personal change, or simply ready for something new, it’s important to approach the sale thoughtfully and with a clear plan.
First, consider why you're selling. Your reasons — retirement, health issues, lifestyle changes, or disagreements with partners — will matter not just to you but to potential buyers. They’ll want to understand your motivation to assess the stability and future potential of the business. Make sure you’re confident in your decision before moving forward.
Next, give yourself plenty of time to prepare. Starting the process at least a year in advance allows you to get your business in shape — financially and operationally. This might include improving recordkeeping, cutting unnecessary expenses, or resolving outstanding legal or staffing issues. Early preparation can significantly increase the value and marketability of your business.
Determining your business’s worth can be challenging. It’s not just about profits; your brand, customer base, processes, and intellectual property all contribute to its value. A certified business appraiser can help by offering a professional valuation and explaining how that number was calculated. Their analysis gives buyers confidence and supports your asking price.
As you get ready to sell, surround yourself with experienced professionals. A business broker can help market your business and identify qualified buyers. They often secure better deals and save you time. A lawyer ensures contracts and documents are in order, and a CPA will confirm your financials are accurate and help you understand the tax implications of the sale. Make sure everyone is aligned with your goals and stays in regular contact throughout the process.
Buyers expect transparency, so gather your documents early. Be prepared to share at least three years of financial records, tax returns, leases, employment agreements, and details about inventory, clients, and suppliers. Use nondisclosure agreements to protect sensitive information. Also, be clear about exactly what is included in the sale — whether that’s physical assets, customer lists, or intellectual property.
Think about how the sale will affect your employees. Will key staff stay on with the new owner? If you want to protect your team or help the buyer retain talent, consider offering incentives for key employees to stay through the transition. Their continued presence can be a major asset in maintaining business continuity.
Finally, once your business is listed, be prepared for negotiations and buyer due diligence. Buyers will ask questions and want to verify what you've presented. This is your chance to showcase your preparation and let your team of experts guide you through final negotiations, contracts, and closing.
Selling your business can be emotional and complex, but with thoughtful preparation and the right guidance, it can also be the start of an exciting new chapter. Give us a call to discuss the next steps and how we can help make your sale a success.