If you’re thinking about selling your business, you should know that hiring a broker isn’t really a necessity. In fact, it’s entirely possible for you to handle all of the aspects of the sale, while saving some money on the broker’s commission fee which is, in most cases, approximately 10% of the overall sale cost.
No matter if you opt for hiring a broker or not, there are various things that you’ll have to do in order to sell your business, and fortunately for all people, the article below will shed some light on what you’ll have to do. So, without further ado, let’s take a closer look at how to sell your business on your own:
Before Anything Else, Gather All Your Paperwork
Before you actually do anything else from this list, you should remember that delays most commonly kill deals. What does this mean? Well, it means that you must ensure that you gather all the necessary paperwork including your financial reports, tax returns, your lease, and so on.
After all, you don’t want a potential buyer to wait for you to gather all of these papers, especially since it can come off as unprofessional. Hence, gather all your profit and loss statements, balance sheets, tax returns, as well as any other document that is important for the sale.
Advertising is The Key
If you have a small business, you should know that one of the most important things you could do is market it on a wide range of sales websites. By doing so, you’ll be able to attract potential candidates. On the other hand, if you’re business has more than 5 million dollars in sales, you’ll need to apply a different advertising strategy.
This means that you should ensure that you create a custom strategy that will involve things such as direct emails or telemarketing, all of which can attract more people interested in purchasing your organization. Keep in mind, if you do own such a large enterprise, you might want to hire a broker that will pay attention to all the details you might miss.
Learn More Things About The Potential Buyers
Do you really want to waste your time on a buyer that cannot even purchase your company? Probably not, which is why you shouldn’t be afraid of asking them for their financial statement. By doing so, you’ll ensure that you don’t waste any of your time, but more importantly, you’ll ensure that the company is purchased by someone financially stable.
Again, when you find a suitable candidate – or several of them – you shouldn’t delay anything. This means that you should provide all the important documents and information, schedule a meeting, negotiate some of the terms, and try to keep them moving towards accepting your offer.
Don’t Reveal Everything to The Candidates
According to the experts from BusinessChew, you must remember that you shouldn’t disclose everything before the deal is done, meaning that you should tell them that they’ll have time for due-diligence and if there is anything that they don’t like when revealed, they could pull out of the deal at any time before the papers are signed.
Why should you do this? Well, there are certain things that shouldn’t be revealed – such as the list containing your clients’ information or a secret ingredient to your manufacturing plant. If they do ask for a customer list, you could always create one that will feature the numbers, however, with redacted names.
Carefully Look at The Taxes
Before you actually set a price for your organization and before you actually accept an offer made by the other party, you should visit your CPA and inquire about the taxes. They should be capable of providing you the information you need, but more importantly, you’ll learn how to structure the entire offer.
Some people choose to tell the potential buyer about hiding their funds from the IRS, and if you’re thinking about that, you should think again, mostly because they can easily use it against you. The best strategy would be to not hide your funds away at least two years before you’re planning on selling your organization. This will allow you to show your revenue and profit without any fear.
Hire a Lawyer For The Job
Of course, you can do some digging online and find all the contracts and agreements you’ll need to draft, however, this might not be wise. Instead of doing this, you might want to consider hiring a layer, especially since they’ll ensure that you don’t do anything wrong when it’s time to close the deal.
Keep in mind, most lawyers will look at the business acquisition as their payday, which is why you must also keep an eye on that area. Last, but not least, you should keep in mind that your legal representative works for you, which means that you have the power to make all the decisions, not your lawyer.
Besides helping you stay on track, the attorney you hire will know how to draft all the necessary documents you need, but more importantly, he or she will be able to review all the changes made and ensure that everything is in your favor. Lastly, if there are any legal issues with your organization, a knowledgeable and skilled lawyer might be able to help you with solving the problems you have before making the deal final and selling your organization.
Selling a business is always a time-consuming and daunting process, and in most cases, people choose to hire a broker even though they’ll still need to do a lot of things on their own. However, if you choose to follow all or some of the tips mentioned above, you’ll be able to make the process easier and less stressful, and more importantly, you’ll be able to do it without a broker.
So, now that you’re aware of all the things you might – and definitely should choose to do – you might not want to waste any more of your time. Instead, return to the beginning of this article, and start with the first task we mentioned – which is gathering all the necessary paperwork you’ll need to show potential buyers.