Top Tips: Do’s and Don’ts of Successfully Selling Your Small Business

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Embarking on the journey to sell your small business? Or perhaps you’re just dipping your toes in the water and weighing your options? 

While there’s no one-size-fits-all manual for this, having a crystal clear game plan can be your secret weapon. It can guide your decisions, trim down risks, and safeguard your interests in this entrepreneurial chess match. 

Here’s a quick rundown of factors to mull over as you contemplate selling your small business:

Getting Your Ducks in a Row

Selling a business isn’t about slapping a price tag on your baby and hoping for the best. It’s more like preparing for a marathon, where long-term strategic planning reigns supreme. 

You can’t just hit the pause button on your daily operations and switch to ‘for sale’ mode. Instead, it’s time to whip your financials into shape and ensure your cash flow is as healthy as a horse.

Got some areas that are a little rough around the edges? Tidy them up, pronto. These could turn into red flags for savvy buyers. 

And remember, the sales process can be a hungry beast, devouring time and focus. Keep your business humming along by setting in place robust systems and processes. It’s all about keeping those wheels turning without a hitch.

Keeping your Ledger in Line

Your financial records, or “books”, are essentially the lifeblood of your business. Any seasoned entrepreneur will attest to the fact that the books won’t balance themselves! Potential buyers will, unsurprisingly, make a beeline for your financial data to assess the risk of the venture. 

Untidy records can wave a red flag for these prospectors, so before you even dream of hoisting that ‘For Sale’ sign – consider a serious commitment to bookkeeping. As part of their due diligence, buyers may expect a deep dive into:

  • Profit and loss statements spanning the last 24 to 36 months
  • The most recent balance sheet
  • Business plans and financial forecasts
  • Details of any bank loans or lines of credit
  • A rundown of your financial systems and processes
  • A comprehensive breakdown of outgoing costs

If a sale is looming on your horizon, consider teaming up with a seasoned bookkeeper to whip your financial records into pristine order.

Choosing Your Champion: The Right Representative

Venturing into the realm of selling your business is a different kind of beast compared to starting or running one. Sure, you’re an ace when it comes to your industry and business operations, but the playing field of sales is a whole new ball game. 

Shoddy advice can give you the short end of the stick, so be sure to roll up your sleeves and dig deep to find the perfect representative to orchestrate your sale. This might be a broker, advisor, accountant, lawyer, or a well-synced ensemble of all.

Having the right confidant in your corner can be the linchpin in sealing the deal successfully. 

And let’s not forget, selling your business isn’t all about the physical assets; there’s an emotional component that can’t be ignored. Letting go of your brainchild can be a tough nut to crack. An impartial third party can help buffer those emotions, ensuring the process kicks off smoothly and stays on course.

Lloyds business brokers are an excellent choice for helping you sell your small business. With years of experience and a team of highly skilled professionals, they can help you prepare your business for sale, find the perfect buyer, and negotiate the best deal possible.

No Half Measures: Invest in Solid Legal Advice

As you’re already aware, selling a business isn’t exactly a walk in the park. It’s a complex dance with several steps and decisions that can make your head spin. Sure, there are evident financial considerations, but let’s not forget the legal side of things. 

Oh yes, selling a business comes with its fair share of legal implications, from sticking to compliance rules to handling financial aspects.

Here’s the deal: when it comes to legal advice, going cheap is a no-go. Instead, put your trust in a seasoned commercial lawyer who knows the ropes of selling a business. Opting for top-tier advice won’t just help you bag the best deal but could also save your bacon from costly blunders once the dotted line is signed. 

Your mantra? Professional, reliable advice, every time.

The Waiting Game: Embrace Due Diligence

No one ever said selling a business was a sprint. It’s more akin to a thoughtful chess match, requiring patience, strategy, and a fair bit of grit. That’s where due diligence comes into play. 

Sure, it may feel like an endless game of ’20 questions’, but it’s an invaluable part of the process for both buyer and seller. Think of this as the ultimate ‘get to know you’ session, where the potential buyer gets to peek behind the curtain and dissect the inner workings of your business.

But don’t forget, it works both ways! This is your golden opportunity to suss out the buyer, ensuring they’re a good fit before you shake hands and sign on the dotted line. 

Remember, your lawyer and accountant aren’t just there for window dressing – loop them in, lean on their expertise, and let them guide you through the due diligence dance.