Whether owners are planning for retirement or looking for a new challenge, selling a business requires a few simple preparation steps to help with the process and increase the value.
The first step is obtaining a business broker who can help estimate the value of a business as well as search for potential buyers, writes Tim Skarda, a consultant with Allied Business group, in the Kansas City Star. Certified professional accountants, brokers and lawyers can have a big impact on the value of a business and the tax implications.
Business owners should also make themselves an unnecessary part of the equation in order to persuade potential buyers that the business model is sound and can be transferred to a new owner. Additionally, expanding a customer and product base will show that a business is not reliant on a single large account.
Automating financial accounts and having transparent reports available for brokers and possible buyers will help speed up the process. Skarda recommends eliminating any unnecessary businesses expenses or deductions, such as travel, that can affect the profit margin.
Misrepresenting a company’s finances and a lack of preparation are listed among the most common mistakes business owners make when selling a business, according to Entrepreneur magazine.ADNFCR-3727-ID-19937277-ADNFCR
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