Asking whether you are ready to exit is an important question. It’s something every business owner will have to address at some point – and it’s important you don’t wait until the 11th hour to prepare to sell your business. There are far too many pieces in this puzzle to wait until the last minute. Begin the preparation process now by asking yourself some key questions. 

Determining Value

First, you must determine the actual value of your business. It is a harsh truth, but what you think your business is worth and what the market feels it is worth may be two very different things. 

This point serves to underscore the importance of working with a merger and acquisition advisor early in the process. An experienced M&A advisor knows how to determine a price that will generate interest in your company and seem fair. Remember that at the end of the day, it will be the marketplace that determines the value of your business, but working with a seasoned professional is an excellent way to match your offering price with what the market will ultimately bear.

Going Within

Secondly, you’ll want to consider whether you truly want to sell. It is not uncommon for business owners to begin the process of selling their business only to realize a few hard facts. Wanting to sell and the time being right to sell are often two different things.

Upon placing your business on the market for sale, you may learn that you’re not emotionally or financially ready. If this happens to you, consider it a learning experience that will serve you well down the line.

Get Your Ducks in a Row

If you have done a financial assessment and some soul searching, and have begun working with an M&A advisor to determine if now is a good time to sell your business, then there are several steps you’ll need to take. You can be sure that any serious prospective buyer will want a good deal of information regarding your company.

At the top of the list of items potential buyers will want to see are three years of profit and loss statements as well as federal income tax returns for the business. Other important documents you’ll need to provide range from lease and lease-related documents, lists of loans against the business, and a copy of a franchise agreement, when applicable. You should also have a list of fixtures and equipment, copies of equipment leases, and an approximate amount of inventory on hand. Failure to have this information organized and ready to present at a moment’s notice could be a costly mistake.

Working with professionals, such as accountants, lawyers, and M&A advisors is a savvy move. Owning and operating a business can be a complex process, and the same holds true for selling a business. Investing the time to seek out experienced and professional advice is the first step in selling your business.