While every step to selling your business can be difficult and complicated, simply knowing the basic steps to selling your business is vital. Whether you are building a business to sell or selling a business because you can't run it anymore, you want to ensure you get the maximum value from the sale.
Know what you are selling
The first step to understanding how to sell your business is to determine what it is you are selling. A business has many parts. This can include customers, inventory, buildings, experience and even your skill, if you are willing to continue to work for the new owner. The more you know about what parts of your business you want to sell and understand their value, the easier the process will go.
Determine your price
Understanding what you have will make determining the price far easier and ensures you will have a price that is fair both to you and to the buyer. This price is generally going to be based on the value of the physical goods plus the income of the business. You will also want to leave enough room in the price for the buyer to negotiate.
Find a buyer
After you have set the price, you need to find buyers. Most major business areas have some type of trade journal, which is often a good place to advertise, but newspapers and the Internet can also help you find the right buyer. This is important because the right buyer will understand the value of your business better than the average person. This saves you the effort of trying to sell to someone who needs to have everything explained.
Finding the right buyer is only half the battle. Just as important is the negotiation. Everyone wants to feel as if he or she got a good deal, and the bigger the purchase, the more important that is. That means negotiation. The key to this is understanding what you need and giving yourself room to negotiate, whether that is lowering the price or adding value.
Having agreed on a deal, you still need to implement it. In addition to being paid, there can be a lot of work in the transition, and you need to be ready. There may be training necessary for the buyer, employees that need help in the transition, and customers that need assurance that they will still get good service. All of this is important not only to the buyer but also to your reputation, especially if you plan to start or sell another business in the future. Selling a business to someone that immediately begins to fail will not only make you look bad but will also make it difficult to get any remaining payments from the buyer.
The final thing you need to do is to look at your taxes. Failure to report income can get you in a lot of trouble, and failure to plan can also cost you a considerable amount of money in tax liability. To understand this fully you will need to speak to a professional, but the most basic issue is simple capital gains tax or personal income, which will have considerably different costs. There can also be tax benefits in accepting payments, so make certain to speak to the professionals early in the process.
Selling a business is a process that often requires a considerable amount of time, knowledge, legalities and even a bit of luck. Following these steps will at least give you a good idea where to begin the process of selling a business.