3 TIPS ON HOW NOT TO SELL YOUR SMALL BUSINESS
Successful planning will have you laughing all the way to the bank.
If you are going to sell your business, here are three tips on how not to sell your business. Successful planning when selling a business can have you laughing all the way to the bank.
For an entrepreneur thinking about selling their business, it’s important to know the reasons why it’s sellable, and more importantly why it is not. Just recently, SCORE identified 3 main reasons on how not to sell your business:
First reason why not to sell your business
Don’t sell your business if you still love what you’re doing: If you still love your work and feel fulfilled every day, there isn’t a reason to step away from your business. Generally, business owners should look to sell because they want to make a lifestyle or professional change.
Second reason why not to sell your business
Don’t sell when the market is in a downturn: The value of your business is correlated to the market within which it operates – therefore, you should look to sell when business is good, not bad. There’s a caveat to not selling during a downtown-- the downturn must be temporary. If you anticipate growth in the future, hold for the rebound.
Third reason why not to sell your business
Don’t sell to the wrong person: Not all buyers are created equal. If you care about the long-term success of your business after the sale, you should do your due diligence for any potential buyer.
Make sure you’re selling for the right reasons if you really want to exit your business.
With the recent upward economic trend and low interest rates, many small businesses are now attracting interest from potential buyers. In fact, BizBuySell Insight Report found that a record number of small businesses were sold in 2018 for the third straight year.
Buying a business is one of the best ways for companies to enter a new market or increase market share.
The best way to determine your business's actual worth is to hire a third-party accountant or business broker to conduct a business valuation. A business valuation typically starts by assessing the value of your company's current and long-term assets, income statements and receivables, short-term and long-term liabilities, and other metrics that show the financial health of your business.
If you are in the market to sell your business, you need to sell it for the right reasons and at the right time. Otherwise you will be seeing someone else laughing to the bank and it will not be you.