The small business industry is seeing an uptick in 2018 in terms of demand, but this doesn’t mean that businesses aren’t susceptible to closing down—or even total business failure. Luckily, business owners can avoid this by way of business selling.
Here are the necessary steps needed to make sure that a business gets sold fast:
- Create a business summary
- Scout for possible buyers
- Choose an offer
- Seal the deal
- Liquidate assets as a last resort
Create a business summary
A business summary contains an overview of the business. The summary comes in handy for business owners who want to quickly sell their business to potential buyers as it saves time and effort when discussing the nature of the company and other important business aspects.
One common misconception when creating a business summary is that it should be created by the business owner. On the contrary, it should be done by a professional with an objective view of the business—ensuring that all strengths and weaknesses of the business are considered.
Scout for possible buyers
After creating a business summary, business owners should look for possible buyers who can save the business while making sure that the business flourishes under their supervision.
At this point, time is of the essence. Business owners can directly approach potential buyers instead of waiting for buyers to make an offer.
However, make sure that a buyer signs a non-disclosure agreement before handing over the business summary in order to safeguard critical company information. This filters out buyers who are genuinely interested in acquiring the business from those who might acquire sensitive information about the business.
Choose an offer
A business owner will inevitably have to choose among potential buyers for the most viable offer that can save their business. This must also be done quickly in order to save time and effort.
Before accepting an offer, business owners must make sure that the potential buyer is capable of buying out the business before signing a purchase agreement.
Requesting for proof of funds is a good way to gauge whether or not a buyer is truly interested in buying out the business. Buyers are known to readily make these documents available to sellers only if they are willing to acquire the business.
Accepting an offer from a buyer also means that both buyer and seller are subject to due diligence. Due diligence means having the right, as a seller, to do a background check on a potential buyer to determine whether or not the buyer is fit to manage the business.
Seal the deal
If the business owner encounters little to zero problems after conducting due diligence on the potential buyer, seal the deal and turn over the business to the potential buyer. Closing a business sale might require the help of professionals—seek assistance from a trusted accountant and/or a lawyer to help ease the process.
Make sure that all the necessary documents needed for closing the deal are available for the perusal of both parties and that payment from the buyer is duly made. Hiring an attorney to do all the paperwork might be an added cost, but this saves time and ensures that the agreement covers all bases.
Liquidate assets as a last resort
Not all business sales are successful, which is why it is important to have a backup plan in case things don’t go along as expected.
If the business has no buyers, is not generating profit or if the business owner simply wants to get rid of the business, liquidating the business’ assets is the most ideal last resort.
Liquidating assets is quick and almost fail-safe since selling business equipment and property is easier to do and will almost always translate to fast cash during times of emergency. A liquidation sale might be a good way to go for business owners who want to effectively turn their business into cash.
Selling business might be a bleak reality for some business owners, but this doesn’t mean that all the necessary preparations can be overlooked. Planning ahead for a possible business closure will ensure that the business will fall into the right hands and both the buyer and the business owner will leave the deal satisfied.