Small Business Management

Selling A Small Business

Factors To Consider When Selling A Small Business

Selling A Small Business

Whether you're looking to retire or pursue other business interests, you'll be faced with selling your business unless you appoint a manager or hand the business down to family members. There are several issues you will need to address to prepare the business for sale, market the business and deal with the proceeds of the business transaction. The following article discusses these considerations.

How to Sell a Small Business

Determining Business Value:

Most business owners establish their own fair value estimate of what they believe the business is worth. Whether or not that matches market reality is another story. Using the services of a business agent or valuation expert allows you to ascertain an impartial view of business fair value. Qualified experts will establish an equipment and inventory schedule and allocate a portion of the valuation to business goodwill. This will give you a guideline to consider for determining the business asking price. You will also need to consider whether you intend to sell your business privately or appoint a business broker.

Establish Business Documentation:

Most business buyers will want to peruse the business documentation prior to making an offer on the business. You will need to have business documentation to support your case for the business valuation and establishment of good will. This will include a business and equipments schedule, all taxation records and the accounting documentation for the business. Informed buyers will do extensive due diligence prior to making the purchase so having the necessary documentation ready upfront establishes greater business credibility.

Consult Financial Planner For Taxation Advice:

How you structure the business and the sale itself can have important taxation consequences. Selling your life's work and then being slugged with a massive taxation bill for income or capital gain is not a very pleasant surprise. The advice of a qualified professional can assist you to investigate the alternatives and determine the best structure for completing and structuring the sale. It is a prudent move that can save you considerable cash and heartache in the long run.

Market the Business For Sale:

You will need to determine the channels to be used to sell and advertise the business. Business brokers can list and recommend advertising channels and will handle all the enquiries and administrative aspects of the sale. If you decide to sell the business privately, you will need to initiate all advertising, handle all enquiries and use the services of a settlement broker to complete the transaction and business handover.

The above represents some essential guidelines to consider prior to initiating the sale of a business.

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