Ground Rules for Successfully Selling Your Business

As a business broker, I have been involved in a number of transactions (and potential transactions) where the business owner wanted to sell, or in some instances, was forced to exit the business earlier than expected. In fact, retirement is NOT the number one reason why businesses sell.Here is a list of the most common reasons why owners sell (or otherwise discontinue) their businesses: 

• Burn-out (the number one reason for selling)
• Health issues
• Personal diversification
• Retirement/semi-retirement
• Death
• Divorce/partner disputes
• Business growing too fast
• Second generation not up to the task
• Loss of market share
• Take good care

If your business isn't ready to sell when the time comes, what are your alternatives?
1.Liquidation of business assets--may be a solution, but one that usually returns very little money to the business owner. If the business had been an operating business, the underlying assets (except for real estate) may be outdated and of little use to anyone. At auction, the assets will bring only what the attending bidders are willing to pay. In some instances, underlying assets are sold to liquidators (or scrap) for only pennies on the dollar. Liquidation of a going business often occurs where the owners have become ill or disabled, or need to retire and have not planned adequately for their exit from the business.
2.Closing the business--is even less attractive than liquidation. That is because many who find themselves in this situation have a tendency to "put off" liquidating the underlying assets in hope that maybe someone will come along to buy this business. This almost never happens.
BUILD WEALTH NOW BY PLANNING FOR THE SALE OF YOUR BUSINESS Here are just a few of the benefits of planning now:A planned sale allows for your goals and objectives on your timetableYou may begin to identify potential buyers

You may be able to create an attractive acquisition candidateYou can begin to understand why a buyer may want to buyYou might learn why buyers would not want to buy--and be able to fix the problemsYou may begin to realize the worth of your business now, and learn how to increase the value as part of your retirement planning
BUSINESS VALUE HOUSEKEEPING CHECKLIST

• Record All SalesEliminate co-mingling of business and non business assets
• Do your own due diligence
• Compliance with taxing and regulatory authorities
• What's the bottom line?

CONCLUSION

You can increase your wealth by knowing a few simple ground rules for successfully selling your business. Just like other owners of closely-held businesses, you know how to operate your business on a day to day, month to month and year to year basis. But your experience in running the business has not prepared you to know how to sell your business.While the information I provided in this article is not all inclusive, it should help you get started in preparing your business for a successful sale--no mater when the business might be sold.

Source by ezinearticles.com