Selling a business can be an intimidating task, but like any goal, can be separated into smaller parts to make it less daunting. While getting the help of an experienced professional, like a business broker, is strongly recommended for maximizing the return on investment for your business and helping you to prevent costly errors, there are several steps in the sale process that you can take to help get your company ready for sale.

The first step in preparing your business for sale is to find out what your business is worth. This process is referred to as a business valuation and can be done by a licensed business broker. A business valuation the best way to determine the true market value of your company using both tangibles and intangibles. Having done a valuation, you will know for what price you can expect to sell your business. This can help you to decide whether you are ready to sell or possibly take time to improve the value of your business. Once you know the value of your company, decide on the minimum price you would settle for.

Next, decide what type of exit strategy you will use. If you’re looking to pull cash out of your business, but aren’t ready to completely walk away, you may consider selling part of it. Do you want to move on to the next stage in life, whether it be retirement, another business, or a new career? Are you willing to stay on as a consultant for a few months? This is where it’s good to have a plan that you can adhere to, so you know how to answer buyers if they ask you to stick around post-sale.

Consider what to do with any real estate attached to the business or any leases that are still under contract. With regards to real estate, decide whether to sell the business and property together or separately. You may even decide to keep the real estate and lease it back to the buyer. If you rent the space where your business operates, take time to review your lease to understand the terms to which you are bound and then discuss your plans with your landlord. This will help you to decide how to handle the lease with regards to the sale of your company.

Consider the amount of taxes that will need to be paid at the close of the sale. Many different scenarios negotiated between buyers and sellers can affect the amount of income taxes that will need to be paid. Getting the opinion of a CPA can help you to figure out the amount you can expect to receive from the business sale, after taxes are paid.

Decide if you will accept offers other than cash. While you may prefer to pursue an all-cash deal, many buyers may be looking to finance the purchase with an SBA loan or by some other means. Cash deals are always easier, but with the SBA aggressively funding loans right now, accepting financed offers may deepen the pool of potential buyers. Alternatively, you may want to offer seller financing.

Decide if you are going to use an intermediary, such as a business broker, to help sell your business. While you do need to pay a fee to brokers, their services can be invaluable if you are not someone who has extensive experience selling businesses. A business broker has access to a network of buyers to whom they can market your business, and do so confidentially, which helps to protect your business during the sale process. They can do the work of finding buyers, qualifying and filtering them, and negotiating on your behalf, with your best interests in mind. A broker does all of this while you continue to run your business, so you don’t have to divide your time.

In preparation for the sale of your business, you’ll have to prepare financial statements. The best practice would be to be diligently maintain your books on a regular basis, so that you can pull financial records at any time. That would make this step an easy one. If you haven’t, you will have to get your books in order before you sell. Essentially, make sure you have a compelling story to tell about the success of your business, and make sure your financial records can back it up.

Once your business is on the market, you will begin to weigh offers that have been presented to you. Consider the pros and cons of each and compare this to your priority list. Are you willing to negotiate the price a little to get more agreeable terms in other parts of the sale. If you are weighing multiple offers, it would be a good idea to re-consult with an accountant to see which has the greater tax burden.

Once an offer has been accepted, a buyer will perform their due diligence, reviewing every aspect of the company and all of the information they’ve gathered about it along the way. During the process, the buyer may uncover things that give them pause, or reason to renegotiate. If at this point negotiations reach a stand-still, you may decide to go back to one your other offers (assuming you had more than one), and work with another buyer.

With all of the other steps out of the way, it’s time to finalize and close the deal. This is where you will agree to contract terms, and review and sign purchase agreements, lease agreements and several other documents. There may also be consulting, non-competition and employee agreements to be signed. At this point all of these details should be worked out, so that all you have to do is show up for closing and sign off on everything. Occasionally a buyer will come back after the sale and say that there was something that was undisclosed or misrepresented during the sale process. To protect yourself from this and prevent a potential lawsuit, make sure you present all of the details of your business accurately, and consult with an attorney to make sure you have the proper disclosures.

Selling a business is a huge process and it can take several months, or in some cases a few years to complete. Prepare yourself, by meticulously going through each step and the sale process will go smoothly. If you are planning to sell your business, consider hiring a business broker to handle the process. If you do, you will be utilizing expert experience and advice that can help you to get the most profit out of the sale all while keeping the details of it from becoming public knowledge and allowing you to run your company without the extra burden of having to find a buyer. Corporate Investment Business Brokers has over 30 years of experience representing companies from all industries and all sizes. Contact us today to start the sale process with a no-cost, no-obligation business valuation.