- Time to sell the business – From the moment the business was established, you should already be planning for an exit strategy. It’s best to have your business be ready for selling anytime and not when it’s badly needed.
- Status of the business – Before putting it on sale, you must have to make sure that it’s attractive enough to be sold. Allot 1-2 years to put your business in its best shape. Your company must be generating income, having a positive cash flow, and still have a great potential to expand in the future. Once it is already on sale, prepare the needed data like tax history and other financials dated three years back. Settle debts if there are any. And it’s also best to give it an overhaul, if needed (i.e. store renovation, equipment repair)
- Staff Performance – The employees will be the front men of the company. They will create an impression on the buyer during the due diligence process. Make sure that they will still be appreciated so that they will still be productive after the turn-over and that the acquisition won’t affect them so much emotionally.
- Business Valuation – How will you know that the price is reasonable? Take time to assess the market, observe the economic trends and the performance of business in the same field. These factors are some of the ones to be considered in determining the value of the business, aside from the annual income being generated.
- Relevant documents – Equip yourself with accurate financial documents, along with other important forms that the buyer might ask from you.
- Sellers of your business – Form a team of professionals who’ll be able to assist you all throughout the selling process. Business brokers, accountants, and lawyers are the right persons to seek help from when it comes to examining the documents, appraising the business, and negotiating until the deal is done.
- Salesmanship – Be honest about the strengths and weaknesses of your business. You must be able to be transparent enough to be buyer to show your track record and to let him/her know why you’re putting it on sale. Have that tone of confidently highlighting the best practices and strongest points of the company to persuade the buyer to push through with the purchase.
- Advertising – You may want to consider having your business listed on online marketplaces like a Small business for sale in Vancouver, which buyers usually visit to look for available business. But you can also tap a business broker to do the marketing for your business. If it’s possible, ask the assistance of a local-based broker with a wide network. He/ she certainly can do a build-up for your business with a more in-depth knowledge of the local market (i.e. Vancouver). But make sure to still keep the whole selling process confidential in order to avoid negative reactions from your customers, suppliers, and employees.
- Smart negotiation – Apart from the asking price, you may also want to negotiate with the buyer other matters like if you can further work for the company for a while after the sale as a consultant or trainer of the new owner and staff. You may also want to get an assurance from the buyer not to lay off a lot of the key employees
- Plans after the sale – Assess your interests and be smart enough to know where to invest the earnings you got from the sale. Make sure it’ll be able to fulfill some of your future goals. You might want to put up another business or plan a grand trip to Vancouver. You may also want to use the time and resources to learn new skills.
- Accurate and comprehensive books and financial records
If you won’t be able to present a complete record of the business’ financials, it will serve as an indication that there’s something wrong that’s happening with the business. You should be ready to disclose these data to the buyer so he/she will get a clear picture on how the business is performing. With a complete set of records, your business will be more valuable to the eyes of the buyer.
Fading of paint and unmaintained equipment of your Vancouver-based store might be some of the buyer’s least concerns, it will still be better to avoid presenting the business and everything inclusive in the sale (fixture, equipment) in bad condition. Unkempt assets might be glaring to the eyes of the buyer. So it’s better to have everything maintained so that the buyer will just focus on the financial aspect.
Take a look into the important documents like leases, contracts, and permits and make sure that everything is updated and readily available. You have to also be familiar with the details reflected on the documents so you can confidently provide accurate answers to the inquiries of the buyer.
Due diligence will most likely be conducted prior to the price agreement. If your business have messy paperwork, the buyer might demand for a lower price or look for other options.
- Detachment from the business
- The buyer might find it hard for the business to operate if it seems that it is highly dependent on you. You need to start detaching yourself from the day-to-day operations so it will give the buyer an impression that it can still run smoothly after the ownership transition. The business should have a framework or established processes and systems that will require an active role from the new owner in the daily operations.
Hire experienced professionals whose expertise can be fully utilized in this transaction. Tap an accountant, lawyer, and business broker who may help you with the preparation of the documents, legality concerns, and valuation of the business. For sure, these people have a wide network outside and inside your local area, making it easier to market your business. For instance, if your business is situated in Vancouver, tap an experienced local broker who knows a lot about the area so it will be easier for him/her to market your business to his/ her connections.