Looking to get out of your business as soon as possible? Our tips will help you sell your business quickly while still getting a fair deal.
By Dan Coconate
Special to Financial Independence Hub
Are you a small business owner ready to start the next phase of your life? If you’re looking to sell your business quickly and move on, read on.
We have some helpful strategies for attracting serious buyers and closing deals below.
Get your House in Order
The first thing you should do before putting the “For Sale” sign on your business’s front lawn is to get your organization and financial records in order. One of the first things that any potential buyer will want to look at is the accounts and books of the business to gauge its financial health.
If the documents and accounts are a disorganized mess that only you can decipher, your business won’t be very appealing to a buyer. Ensure your financial documents are organized and straightforward, including critical documents like the complete list of all assets, copies of patents and licenses, and profit and loss statements.
Hire a Business Broker
As you prepare for a sale, hiring an independent business broker is one of the best strategies for selling your business quickly. A broker will take a commission from the sale, but their experience and skills are invaluable when selling a private practice or business.
They’ll connect you with more potential targets and get the word out that you’re looking to sell and vet buyers for you. They’ll also represent you in negotiations and offer valuable insight to attain the best deal as quickly as possible.
Sell to a Competitor
While it may sting the pride of some to sell their business to the competition, it’s often the fastest and easiest option for small business owners. After all, what competitor wouldn’t be interested in expanding and bringing their competition under their umbrella?
There are many pros and cons of selling your practice to a competitor, but an undeniable benefit is the buyer will know the business and the industry. So the transition will be much faster and smoother. Personal feelings for the competition aside, negotiations should be much quicker as you and the buyer understand the industry and know what the business and its assets are worth. Plus, competitors often offer to pay more when they feel incentivized to eliminate competition.
Consider Seller Financing
If you’re having trouble agreeing with a buyer and want to get the sale process over with, you could consider utilizing seller financing. Seller financing is when the buyer pays the seller through installments rather than a lump sum.
It makes the business more attainable but does bring the downside of not offering the seller much cash at the time of the sale. You can also try to arrange financing from the bank, but that’ll likely lengthen the process by introducing a third party.
Sell to Employees
Lastly, if you can’t find many serious buyers, you can always look internally and sell to employees. Selling to an employee or a group of employees offers many advantages. You can trust they know the business and feel invested in its success.
The traditional method of selling to an employee or group of employees is agreeing to a valuation and then creating a note where the buyers agree to pay back the seller using the business’s profits in the future.
Dan Coconate is a local Chicagoland freelance writer who has been in the industry since graduating from college in 2019. He currently lives in the Chicagoland area where he is pursuing his multiple interests in journalism.