Selling Your Small Business? 3 Tips for Making the Deal you Want

There are hundreds of thousands of small businesses available for purchase yet 80% won’t sell. Many businesses are overpriced, the asking price is solely based upon the owner’s desire to make x amount of dollars. How do you ensure a successful sale and the best return on what is likely your most valuable financial asset? These critical decisions are among those for which owners are least prepared since they may be confronted only once in a lifetime. Owners may have decades of experience at managing their business but little to no experience with the complex process surrounding their exit.  Every business owner leaves their business, either by death, sale, closing or succession. Which way do you want to leave? Here are 3 tips to increase your shareholder value and close the deal:   Timing: Early planning is essential Although every business will be faced by the owner’s exit, very few small business have a liquidity or transition plan in place. Caught in the day-to-day management, they fail to recognize it is already time to think about their exit. As a result, they react to a life event, aging, illness, etc., and do not harvest the fruits of their life labor through a proactive strategy. A sufficient time-frame, generally between three to seven years, will dramatically increase your leverage and consequently your return.   Value drivers: Objectively assess your business A small business owner’s life is often so intricately intertwined with the business that it makes it very difficult for them to objectively and effectively assess the value of the business. A professional third-party assessment will identify the business’ value...