Many people dream of becoming entrepreneurs, and often the biggest...
Letting technology do the heavy lifting for certain monotonous tasks...
Mergers and acquisitions (M&A) can dramatically alter a...
Working capital: The difference between your current assets...
A lot goes into this critical financial and emotional decision. Make sure you have the right tools.
November 3, 2023
The decision to sell your first business can be very emotional and challenging, followed by an arduous process. Whatever your reason for selling your business, it’s essential to find the right buyer. After all, the valuation comes from your years of hard work and the brand equity you’ve built from the ground up. So whether you’re looking to finally put together a nest egg for retirement or just looking to explore new avenues — it’s necessary to get the best price for your hard work.
In preparation for the sale, there are practical necessities to consider — including the readiness of the business, market conditions, and potential buyers. As soon as you’ve decided to consider selling, it’s best to start planning the next steps.
One of the first steps when preparing to sell your business is to value it accurately. Ensure a bank, buyer, or business appraiser has independently validated your asking price.
You’ll need legal, tax, and business advice to ensure the transactions go smoothly. At a minimum, get a qualified accountant, tax attorney, business broker, and transactional lawyer on your team.
Additionally, having the right team by your side can help ensure the best options and alternatives are part of the discussion.
Seek clarity on the factors that have led you to sell your business. Whether it’s to pursue new opportunities, disputes, or retirement — understanding your underlying reasons can help you better shape your sales strategy and its outcome.
Ensure that you have organized and clean financial reports. These include a complete balance sheet, income statement, and profit and loss statement clearly outlining critical business metrics.
Buyers may want to review copies of your business’s material agreements. So keep documents like crucial customer and supplier, shareholder agreements, and employment agreements on hand.
You may be ready to let go of your business. Still, the selling process, which sometimes takes a year, can be emotionally draining.
Ensure that you’re emotionally ready for the transition when it occurs. You can even consider planning your exit strategy to remain objective during the sale process.
When contemplating a business sale, it is not only your financial and emotional preparedness that matters. Your business also needs to be in the right state.
Address your business’s weaknesses, if any, beforehand so that you increase its sale price. Work with your employees and customers on how you can improve the company.
Buyers are likely to view your business critically, and sometimes, the truth can be hard to swallow. Refrain from letting their opinions feel like a personal attack if the results differ from what you expect. Instead, stay level-headed during the process.
A business sale often carries a hefty price tag, resulting in greater tax liability. Consider the tax implications of selling your businesses beforehand to ensure you’re well-prepared and can reduce your tax burden.
Before putting your business up for sale, you should get a good understanding of its impact on your employees.
Consider whether the buyer will take on all the obligations towards your employees in your business. And if not, how do you plan to pay for the severance and support your employees during the transition?
Selling a business is a complex and time-consuming venture. Your personal and business readiness can ease the burden, as can the help of a team of professionals.
Want to get more for your startup? Escalon can help ensure that your accounting, financial records, and taxes are accurately done and that they communicate the total value of your business to potential buyers. Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.
Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.
Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.
Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.
Mergers and acquisitions (M&A) can dramatically alter a company’s trajectory—unlocking new markets, technologies, or customer bases. Yet, many deals stumble...
Working capital: The difference between your current assets and your current liabilities. It’s a key barometer of financial health. While...
Expanding your team and capabilities is critical to sustaining growth—but the question often arises: Should you build an in-house department...
A Chief Financial Officer (CFO) isn’t just a numbers person anymore. Modern CFOs play a pivotal role in shaping strategy,...
Once your annual revenue surpasses $10 million, you attract more attention from regulators, partners, and customers, especially regarding data privacy....
Hiring is one of the most pivotal processes in any organization, particularly for a medium-sized business looking to scale. Yet...
At Escalon, we are committed to keeping our clients informed about the latest trends, challenges, and opportunities across the industries...
Growth in headcount brings exciting opportunities for a business, but it also poses a key challenge: How do you maintain...
Rapid expansion and remote work trends have empowered medium-sized businesses to hire talent nationwide. Yet with multi-state operations come multi-layered...