Self Employed: Selling The Business
If you are considering selling your business:
- Think about colleagues who do similar work who may want to expand as potential buyers. They are already familiar with your business and are aware of the potential upside.
- Also consider going public with ads in places likely to attract attention of people interested in your business without disclosing your identity.
When thinking about the value of your business, consider the intangibles such as Intellectual Property and the goodwill you've accumulated with your clients and in the community.
Get an accurate fix on your finances. Prepare accurate financial statements. It may be worthwhile to have an outside accountant look at your books and provide you a letter about what he or she found. The review would be less expensive than a full audit, but may give potential buyers a degree of comfort about the accuracy of your numbers. If necessary, consider the cost of an audit part of the cost of sale.
Simplify what you are selling. Buyers don't appreciate complications.
It is not advisable to let your clients know that you are considering selling your business while the process is ongoing. It may raise questions about whether the client's needs will continue to be served, which in turn may prompt a change.
Consider using a business broker to help set a value on your business and to find a buyer. Inc.com (www.inc.com ) suggests the following:
- Interview more than one broker.
- Ask about:
- The broker's background and experience, particularly with respect to businesses like yours.
- Whether the broker is accredited or a member of a trade group.
- The services the broker provides.
- The broker's success rate.
- The broker's current activities. You can do some checking on your own about the broker's current activities by looking at the broker's web site and local newspapers.
- How the broker will market your business.
- Get in writing signed by the broker what the broker agrees to do for you.