If you’re like many small business owners in Nashville, you’re probably seriously considering selling your company after the economic downturn brought about by the pandemic. It’s not always easy to part ways with a venture you’ve nurtured for years. But there’s also no shame in wanting to sell and start fresh, perhaps with another project or a different career.
If your business took a big hit in the previous year, you might think it’s not worth selling and it would be best to simply close it down. But you just might find that many enterprising individuals are looking to buy a business just like yours. Get professional advice from a CPA firm on the best course of action.
Here are some of the steps you can take.
1. Get a business valuation
Your CPA can help you determine the value of your business. Even if you had to scale down your operations, it would be wrong to assume that there is no business to sell. Another company, perhaps a competitor or a larger enterprise looking for opportunities to expand, may be interested in acquiring your client list, the goodwill your brand has established, and your market share.
If you have closed your business, you can sell off your assets, including your equipment and inventory. You can then use the proceeds to embark on the next chapter in your life.
2. Get your financial statements in order
This goes alongside a business valuation. Your financial statements will help you organize your assets and have a good look at the profitability of your business. It may even spark an idea or two on new directions to take. With the fluidity of businesses due to the pandemic, it may be best to do your financials monthly or weekly instead of the typical quarterly intervals.
If you decide to sell your business, your financial statements can help buyers see the worth of your business and justify your selling price.
3. Get in touch with a business broker
A business broker can help review your business and provide you with professional advice on the options you can take. With their network and experience, they would know how to find the right buyers and help you come up with a plan on how to make your business or your assets attractive to buyers.
Another reason to work with a business broker is that a business being sold with a broker often gets a higher valuation.
4. Prepare an executive summary
An executive summary includes all the information a buyer will want to know about your business. This includes your assets, liabilities, profits or losses, taxes paid in the last few years, and a description of your operations.
Selling a business can be a hard pill to swallow, but sometimes, it’s the best option you can take, and it can even lead to something better. Work closely with your CPA so you can get the best financial advice.
Steps to Sell Your Business at the Best Price, Tworld.com
Is It Time to Hibernate or Sell Your Struggling Business?, Nolo.com