Business owners plan for the sale of their business at least one year ahead of time, and they create these plans with a broker to address all elements of the sale. The plan must address the products the business sells or manufactures. It should also outline how patents and trademarks are used once the business is sold.
Business sales are complex, and a broker could help business owners avoid mistakes. They explain all options for selling the business including placing it on the market or selling the business through an auction. The brokers show the owners the potential outcome based on an official appraisal.
Hire a Broker to Sell the Business
Brokers know all the steps for selling a business to buyers and investors. They know what steps the business owner must take to get ready for the sale including management of their workers and decreasing the potential for higher-than-average worker turnovers.
The brokers do not recommend informing the workers about the sale until the process starts. It is best to keep the information to themselves and avoid the sale appearing in the media. Even a rumor could derail the sale. Business owners can learn more about getting ready to sell their business by visiting BusinessBrokersAustin.com now.
Arrive at the Selling Price
The official appraisal for the business shows the business owner how much they can expect to get from the sale of their business. It prepares them for a realistic sale of the business and all their investments.
The findings may be a shock to some business owners, and the reality is that investors will not pay a lot more than the appraised value until the business has a significant number of incoming profits. The broker can help the business owner evaluate their company as a whole and new product lines to determine the selling price for the business.
Hire an Accountant to Prepare Financial Statements
Financial statements must be accurate, and there shouldn’t be any misleading details in any records. Brokers advise business owners to hire a certified accountant to evaluate the financial records and eliminate any discrepancies that could lead to miscalculations.
The business profits must be factual, and there must be data to support the records. Buyers will want to review the tax returns for at least the last three years to determine how profitable the business has been. Any trends of declining profits could decrease the value of the business.
Create An Executive Summary for the Business
An executive summary for the business explains what the business does and how. It must present the buyer with a better understanding of what to expect when buying and taking over the business. The mission statement for the business and what the business owner hopes to achieve with the business are disclosed in this summary.
It explains details about how they produce their product lines and who their target demographic is. Buyers can review the information and determine if it is a venture of interest to them, or if they would want to make changes after they buy the company.
Identify What Product Designs Come with the Business
Businesses that manufacture their own products will have patents for their product designs. The patents prevent others from creating the same products and profiting off of them. When selling a business, the owner must decide what product patents come with the business. Products that have become household names and are immediately associated with the company should come with the business and give the new owner an opportunity for immediate profits.
Place the Business on the Market
After the business sale starts, the business owner must follow all terms connected to the sale. For example, if they are directed to continue to run the business, the business owner must do their part to keep the business profitable. If they are directed to stop operations, they will need to shut down the business until a new owner takes possession of it.
The broker will promote the business sale and place information in front of buyers and investors. The information should direct the buyers on what to do if they are interested in purchasing the business.
Let the Broker Assess Buyers
A broker will evaluate all buyers who present offers, and they are familiar with instances of fraud. Business owners to try to take on the task themselves could make mistakes and fall for schemes. The brokers conduct research on the buyers and investors to ensure that they are legitimate. They will also verify any financing secured by the buyers to ensure that the buyer has the funding to purchase the business. After the buyers are verified, the broker presents the offers to the business owner.
Set up The Business Owner’s Exit from the Business
The business owner will need to create an exit strategy when selling the business. The exit strategy prepares the business for the new owner, and the seller will acquire their profits during the time when they were operating the business. The company may shut down to give the buyer a new start and to show when the profits belong to the new owner.
The seller must transfer ownership of business accounts to the new owner and complete a transition period to keep the workers with the business. The exit strategy should ensure that all assets that aren’t going with the business are transferred to the seller.
Business owners follow a careful plan when selling their business and its assets. The steps begin with plans to make the company more profitable and arrive at a fair selling price. Brokers help the business owner prepare all documents for the business sale including all financial records and tax returns for at least the last three years.
Brokers can also help the business owner determine what trademarks and patents are included in the sale. For instance, if the business owner wants to take certain products with them to create a new business, they must transfer the patents into their name. Brokers can help the business owners avoid common mistakes that lead to problems later.