- The buyer is investing in the future success of the business.
- You can almost always increase the purchase price by planning carefully and choosing the right time to sell.
Action Steps
The best contacts and resources to help you get it done
Start early
Assess your books and prepare financial statements and projections that demonstrate to potential buyers your business' growth and revenue potential.Small-business buyers particularly want to see cash-flow projections.I recommend: Save time and organize your financial statements with PlanWare.Use this cash-flow projection tool from the Michigan Small Business and Technology Development Center.
Set your asking price
Weigh your financials and then figure out what your business is worth.I recommend: Get a valuation report from BizBuySell.com, an online business-for-sale marketplace.Find what comparable businesses sold for in your region with a report from BizComps.Or get your business appraised by a member of the Institute of Business Appraisers, the International Business Brokers Association or the National Association of Certified Valuation Analysts.
Create an operating manual
Put together a procedure manual that documents exactly how to best run the business; include all unwritten rules and undocumented techniques.I recommend: Create a customized manual with WriteExpress, or use Pathworks' Ambient software that automatically converts free standing documents into active checklists that are easy to use.
Review your leases
Make sure the lease does not expire or come up for renegotiation at the same time you want to sell the company.I recommend: Use Real Estate Lawyers.com to find an attorney to help you renegotiate.
Tips & Tactics
Helpful advice for making the most of this Guide
- Preparation is not overnight: The day you open a business is the day you should begin preparing it for sale.
- Keep employees in the loop: Don't let loyal employees find out about the sale of the business from a third party.
- Check your contracts: Terminate contracts serve little purpose or drain financial resources.
- Reevaluate your location: If your current site might cause problems for the new owner, consider moving before the sale.
- Control the process: Don't let yourself be rushed into a bad transaction.
- Eliminate problem accounts: A new owner won't want to deal with customers who are troublemakers or who are used to receiving special treatment. Cut them loose.
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Take your career to the next level. Enroll today & get the skills you need to advance in your field. Visit our site & download our course catalog now.
Upcoming Programs | Build Skills | Wharton Financial | Wharton Leaders
ExecEd.Wharton.UPenn.edu
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Offers business advisory services including mergers & acquisitions.
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Offers business advisory services including mergers & acquisitions.
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