Whether you’re looking for a new business to invest in or you’re simply ready to move on, selling your small business can come with a lot of responsibility. When you’re ready to sell your company, it’s not as simple as going to a broker as saying “Sell my business.” There are a lot of factors to consider first, such as net worth, stock value, and the funds you’ve already put into the business. It’s not a matter of simply finding someone to take over the process of running and owning the place. You need to make sure you’re getting the absolute best price for your hard work before handing over the keys. If you want to get the absolute best value for your business, here’s what you need to do.
Figure Out Your Company’s Worth
You might think this step is easy enough to do. Calculate the amount of the rent of the property or the current value of the space if you own it, plus monthly expenses and yearly take-home pay. But hold on a minute: Figuring out the real valuation of your company isn’t that easy. Quite often, it has to do with a lot of unseen forces that are beyond your control. For instance, if you opened up a sandwich shop a few years ago and business was booming but has since declined, your business is worth less overall. Trends come and go, and if people aren’t buying what you’re selling, it’s going to have an impact. That doesn’t mean, however, that you should undersell or allow yourself to accept a lower offer. Instead, do as much of the math as you can, and factor in what you’d like to get back from your original investment before you sell.
Time It Right
If you’re selling a home or a business, timing is everything. Except that, while houses tend to increase in value in most cases, businesses tend to be a lot more trend-dependant. A few years ago, frozen yogurt was in fashion, and companies like Pinkberry and Menchie’s were raking it in. Today, that trend is on the downswing, and franchising out companies that only offer one very specific product is going to be a struggle. That’s why you can’t be too desperate to sell your business quickly if you want to make the most money out of it. If the market isn’t good right now, wait it out. Tides turn, and you might find that your property is more valuable than ever after only a few short months.
Think About the Future
If you’re selling your business for reasons that don’t have to do with your finances, you might be eager to sell your place for the first offer that comes along. However, if you actually want to get a good price on all your hard work, you need to think about what you need for the future. You’ve put a lot of money, sweat, and tears into your business. You should be able to reap the rewards by getting a fair price on it in the end.