With 2020 approaching soon, you may be eager to sell your small business in the new year; however, it is important to plan carefully and make the move toward selling at the right time. Doing so, can have a positive impact on your selling price. Observing market conditions, preparing your business for would-be buyers and strategically positioning it as a viable business will all play an important role when you decide to sell.
Prepare in advance
It pays to prepare your business for sale well in advance of placing it on the market. Plan to allow at least six months to a year to prepare your business for sale. Diligent preparation will help you to show your business in the best light. You will want time to gather all the necessary documentation that potential buyers will expect to see. Also, keep in mind the time frame it takes to complete a business sale. Most sales take 6-12 months from the time the business placed on the market to closing the transaction. Careful preparation will give you more flexibility to align your sales timing with a favorable market and could help you avoid the pitfall of having to sell quickly at a less-than-ideal price.
Research the market
In order to establish a fair asking price, you’ll need to do some research to objectively determine where your business fits into the market. While you certainly don’t want to under price your business, pricing your business too high may drag out the sales process or even prevent your business from selling at all. Fluctuations in the market, and more specifically within your particular industry, will help you determine the best time to put your business on the market. Look for similar businesses for sale to get a feel for the current market and then seek the help of a professional by calling Gateway Mergers and Acquisitions.
Look at your business through a different lens
It is important to look at your business through potential buyer’s eyes in order to determine your business’s strengths and weaknesses. Take the time to promote your business’s high points and work on its low points with an eye towards improving your selling price. Remember that buyers would ideally like to purchase a business when it’s doing well and showing steady growth. If records show your sales in decline, then it may not be the best time to sell, since this will negatively impact your selling price. You want your business to stand out in a competitive market as the best investment in its field. Your documentation should include past results and current placement in the market, as well as the potential for future growth. This is where the guidance that Gateway will provide will prove invaluable.