Six Steps to Selling Your Business

Deciding to sell your business is never easy. Is it the right time? What will you do next? Will you get the money for your business that you believe its worth? Will it be hard to sell your business? All of these are questions you are probably thinking about. While the decision is a tough one, once you have made the decision to sell your business there are some steps you can take to help the process move along smoothly. They are:

Step 1 - Getting Your Business Ready for Sale. Once you have decided to sell your business, your next goal is to make as much money from its sale as you possibly can. To realize the best profits it is smart to take some time and make sure your business is ready for sale. To do this you will want to make sure all of your documentation for your business is in order. You will want copies of your business plan and your financial statements. You will want written documentation on your employees and policies. You will need to look at all of your business's strengths and see if there are areas you can quickly improve. You will also want to do simple things like make sure your business is clean and presents a good curb appeal just as a house for sale would.

Step 2 - Value Your Business. When your business is all ready for sale you will want to determine its value. You can use a variety of ways to determine the business's value. You can use your sales numbers, you can use your asset values, or you can hire a consultant to do the valuation for you.

Step 3 - Hire a Business Broker. The easiest way to sell your small business is through a business broker. However, they do come at a cost, just as if you were using a broker to sell your home for you. You will want to decide if you can negotiate the sale of your business on your own or if you should hire a broker.

Step 4 - Create a Selling Book. Selling a business requires you to create a selling memorandum, or simply a selling book. This will be a document which tells about your business. Your selling book will contain the following: an introduction about your business, a description of your company and its owners, the offering price and terms of sale, industry information, the company personnel and managers' information, buildings and equipment owned by the business, and all of the financial information for the company. This selling book will be given to all qualified buyers.

Step 5 - Dealing With Taxes. The government will get a chunk of your money when you sell your business. For this step you need to consult with a tax professional and see how you can minimize the taxes you pay for selling your business.

Step 6 - Negotiate Your Deal. If you are selling your own business the last step in the process is to negotiate your sales deal. If you are using a broker then they will complete this step for you. Negotiation is very important and you should read-up on negotiation skills and go into your negotiation as prepared as possible.