Businesses of all sizes will eventually need to pass down to the next generation, if possible. Large corporations usually have no issue with this matter as succession plans are always in place. Selling small businesses are more difficult as they have plenty of issues to deal with. Unfortunately, small businesses sometimes disappear into thin air without being taken over. Here are some useful tips you can apply when selling your small business.
Just like any product that goes on sale to the consumer, selling small businesses requires the same. Before determining the selling price, you would need to lure potential buyers with the value of your business entity. These values come in the form of a third party business valuer that would evaluate your business potential. Having an expert to assess the value of your small business goes a long way before you can demand an asking price. These values include your company assets, overall financial health, business opportunities and threats.
Small businesses are the easiest to get sloppy because most business owners start the business without even thinking to sell it. Hence, bookkeeping, asset management, marketing and operating systems are usually taken for granted. Most small business owners assume that their next-generation would take over and inject fresh ideas to make it the next level. But even that, all of the abovementioned must be in proper and updated status before it can change hands. Sales and profits are indeed significant, but cleaning up the business makes it all worth it to sell the company at a better price.
A lot of times, small business owners begin a business to make a living for the family. Often, the business owners are very sentimental towards their business, even when it does not fit in the change of times anymore. The best scenario for small business owners is that their business take over happens naturally. We all want that, but the truth is, you have to plan an exit strategy the moment you plan your business strategy. Most business owners will have that one or two best employees throughout the business operations. These employees are the best option for your business to take over to commence. At the very least, you can be sure your pride and joy that is the business will have a better chance to continue serving your customers.
What happens after you sell your business away to the buyer? You assume they will take it to new heights and you will retire leisurely. The best practice is to be on the advisory panel for the shortest time possible. You know your business best and handing it over to a new owner takes courage. Micromanagement is a big no-no and frowned upon. The new owner will appreciate your guidance for all the times you are there but keep in mind that you need to retire.