Just because you decide to sell your business does not mean that it is ready to be sold. There are certain criteria to prepare a business for sale. This article is a guide on how to create a good business plan for selling preparation, and what questions to ask when your company is being acquired.
How to sell a business?
Selling a business is as common as starting a business. To create an effective business, you need to follow a certain technology. In the same way, for a successful sale of a business, it is desirable to adhere to certain rules and to know the features and nuances that you may encounter at each stage when selling a business.
So, there are common questions to ask when your company is being acquired:
- Can you show the economic and financial results for the past period (from 1 to 5 years – depending on the size of the enterprise)?
- Do you have all the necessary licenses, certificates, and permits to operate, do they expire in the near future?
- Are all intangible assets documented and officially protected?
- Has a property inventory been carried out?
Basic aspects of preparing to sell your business
So, selling a business includes the following steps:
- Preparation for the sale of the business
First of all, you need to conduct a business valuation. When it comes to the sale of a small business, in most cases, when evaluating a business, one has to rely on management reporting, because it can differ significantly from accounting. Besides, for productive due diligence, it is recommended to use virtual data room software that provides a secure data warehouse and real-time collaborative workspace. By the way, it is better to prepare all the information about the business being sold in the form of a visual presentation.
- Search for potential buyers of the business
Now that the business is prepared for sale, you can proceed to the search for potential buyers. Several possibilities can be used to solve this problem. There are also a large number of Internet sites where you can post information about the business you are selling. You can search for potential buyers of the business yourself, or you can attract specialized agencies. Thus, at this stage of selling a business, it is very important to interest potential buyers so that they take the first very important step – get in touch with you.
- Showing (presentation) of business
If it comes down to show, then the potential buyer is really interested in acquiring your business. During the show, it is desirable to demonstrate all the documents that can confirm the information contained in the presentation. The buyer should have no doubts about the data provided to him. When showing (presenting) a business, you need to be prepared for the most unpleasant questions.
- Registration and execution of a transaction for the sale of a business
The complexity of this stage depends on the scale of the business. When selling a medium and especially large business, closing a deal can be a much more complicated process. The principles are the same, but all this can take much longer. The contract for the sale of a business prescribes all the conditions for the sale, including its cost, as well as the obligations of each of the parties. In the act of acceptance and transfer of assets, all business assets are recorded: both tangible and intangible.