Inaugurating a business by capitalizing a hefty amount in it, is a tantamount predicament task to auctioning it off to someone you either know or not. Selling a business is not an easy decision made by an entrepreneur, because that business conserved as revenue in his life.
On the other hand, retailing any ilk of businesses depends on the nature and size of the business, whether it is a small or large corporation. Moreover, people won’t acquire any business without seeing a benefit in it. Everything comes at a price.
For instance, in a small business, buyers won’t see many benefactors in it as it is small-scale production and won’t exist for long-term growth. Meanwhile, if you peddle a large business, the very first thing a buyer looks for is- Long-term revenue and growth. So, ascertain the value of your business with the help of nature & size.
You can’t give away your business to someone’s hands without analyzing what comes next, like quotes ‘Think before you Act’; Sketch your future plan with the money you're gonna get from selling your business.
Here are the things an entrepreneur or a businessman should definitely know before selling the business.
7 Things You Should Know Before Selling your Business
FAQ
7 Things You Should Know Before Selling your Business
Selling off your business without any second thoughts will drive you to someplace either in a propitious or unpropitious future. Because you have done the diligence in growing your business which made your life better as well as contributed profuse services to people by gaining goodwill from it. But what if you have sold it to any wrong hands, this will bring a bad repute to you shortly.
So, Think twice before auctioning your business. If you are vacillating about selling your business, then don’t do it. Only if you are uncertain in monetary terms or challenging to manage your business, then you can look to market your business to someone who could do it efficaciously.
Arbaz Sayed
What’s your next act?
It is cited that preparation is the sole key to success, so start prepping in advance in case you don’t want to lose a great opportunity in the near future. Always, compute your next step, because that is gonna manifest your position in the future.
These questions may pop up in your mind while selling your business: ‘What am gonna do after the business is bought? Will it be good for me and profitable in the future? Get ready to answer all these questions before giving away your only source of revenue. Therefore, plan subsequently to your list and set an alternative solution like- finance in some property and get revenue from it or become a partner in a company.
Well, the ending is the new beginning, you have to make up your mind in selling your business after analyzing what’s your next step.
Know your Stable status before Selling off?
Check out whether you have sufficient money to pay off the expense or meet any other requirement for the future. Selling off your business may credit a large amount of money in your account, but will it be enough? Will it be adequate to survive till my last days? To sell your business in case you want to earn any profit out of it, start a new business or sell it if you are financially unstable to satisfy obligations.
What is the Opportunity cost?
Before selling your business, estimate the approx opportunity cost you will get in that. Generally, opportunity cost is the best alternative when a thing is foregone. You have to estimate the value you're gonna get when you market off the business, ask yourself whether the opportunity cost of your business will be profitable or not? If not, what is the intention of selling it? And if yes, then how much are you gonna be helpful and what are you gonna do with it?
Anagha S
Estimate the Value of your Business
Goodwill is the brand name, which you have earned in the locality of your business. Buyers will definitely pay a tremendous price when your business has a good reputation in the market and automatically accelerates demand. So, fix the purchase price according to the value of your business.
Don’t fix the purchase price too high
You don’t know the other side excepted acquiring price of your business. If you fix a higher price than the expected one, then the buyer won’t be amenable to acquire the business. So, determine the expected price of your buyer, then bargain for the price you want to sell your business.
Target Multiple Buyers bidding
Don’t propose for one particular buyer, target various buyers and see how many of them (potential buyers) are inclined to invest money in the range that you have set for your business. Besides, this will augment your company outlook in terms of profitability as well as increase demand for your business in the market.
Confidence in the Potential of your Business
The business, which you have strengthened for years in good terms should be given to the right hands. If you have ceded your business in good hands, then the long-term growth of reputation is guaranteed for you in the near future.
Unlike, in case the business is rendered to wicked hands, then such a reputation which you have amassed for years before selling it would go trivial. So before trading your business, determine the potential of the buyers in sustaining the business credible.
Alan Joseph
Conclusion
Well, like said above, starting and selling a business requires a lot of time and effort. The thought of selling a business befalls when you face a financial crisis to meet business requirements and when you want to sell the business in order to start something new in the future.
The amount you receive in selling your business highly depends on the value of your business - Goodwill. On the other hand, finding a potential buyer who is promised to maintain your business on good terms after surrendering it to the buyer. Therefore; Keep in mind, work in progress to result well in a long-term process, if you are planning to sell off your business in the future at a higher price.
FAQ
What is the rule of thumb for valuing a business?
The common rule of thumb for valuing a business is to calculate your percentage of the annual sales, or the last 12 months of sales/revenues.
Do I have to pay tax if I sell my business?
Yes, you may have to pay tax if you sell your business.
What to do before you sell your business?
Few things you should know before selling your business is to estimate the value of your business, target multiple buyers bidding and Don’t fix the purchase price too high.
Author: Abinaya Arangarajan
Source : https://startuptalky.com/selling-your-business-guide/
Date : 2021-09-08T16:15:43.000Z