After years of making your business grow, you finally came to a crossroad and thinking of ways to sell your company. It could be because you have grown tired of the business or you have other plans and the proceeds of the sale can be used for another venture. If the company is performing and therefore can be attractive to buyers, then you have little problem and only have to consider the following approaches.
Prepare your books
When you want to sell your company, the buyers will first and foremost try to look at its books. They will want to see the assets and liabilities, the profit and loss statement for the last three years for instance, and other documents that can help them identify the benefits for them. This is called due diligence and a standard practice when an investor or buyer is invited.
Know your company’s value
You must come up with an amount that will be attractive to you as well as the buyer. Pricing your company out of reach is not advisable as the buyers will also make a study of the potentials of your business should they take over.
Announce your intent to sell
You must let prospective buyers know of your intent to sell. Big corporations use the services of other companies like banks in announcing their intent to sell and the agent will be the one to look for prospective buyers. The agent will earn a commission when the deal pushes through and the rate is according to a written agreement.
There could be more than one offer coming from prospective buyers. But more importantly, you have to pre-qualify and determine who among them can make a serious offer. There are also bargain-hunters in corporate buy-outs and you may not want to deal with them if you know they will not make a fair offer.
Learn to negotiate
There are several techniques in making an offer to buy and you have to learn how to negotiate to your advantage. Most of the buyers prefer a payment on installment basis so you have to decide if you are amenable to this kind of arrangement. You have to picture the negotiations and come up with your counter-proposals.
Settle tax obligations
Part of the deal to sell the company is the payment of taxes when the contract of sale is consummated. Make sure the tax due to the government is settled to avoid problems later on. The tax due must be factored in the computation of the net proceeds of the sale.
Get professional help
If would be better if you will seek professional help in selling your company. A lawyer and an accountant can help you in this regard. The former knows the legal issues while the latter knows the books. Together, they can help you reach a profitable sale of your business.