So what is the most important thing to do when selling your small business to ensure you get a good price?
Have a professional business valuation completed. This will ensure you know what your business is actually worth. If you don't know how much it is worth it will be incredibly hard to know if you are getting a good price when a prospective buyers make you a proposal. With all the resources on the internet you could probably complete a business valuation on your own but I would highly advise still having an experienced professional complete one to compare to your own analysis. By having this done professionally you can have the piece of mind that you know for certain what your business is worth. For the cost that they usually are (generally they range from $2,500 to $5,000 depending on the complexity of your small business) this is a small amount to ensure you get a fair price. Given most small businesses sell for multiple hundreds of thousands or millions of dollars a business valuation is a small cost for something which could easily save you from under valuing your business by tens of or hundreds of thousands of dollars.
The benefits of having one done professionally over doing it your self are
- experience (professional business valuators have done numerous business valuations and know what to look for)
- second perspective (as with anything in life a second perspective can sometimes bring to light new things)
- increased credibility with sellers (by having a third party complete a business valuation it will increase the credibility of your proposed sale price if you decide to share the valuation report with your buyer)
- time (by having someone else complete the business valuation you can focus on preparing your business for sale and lining up potential buyers)
- multiple methods used (a professional business valuator will use multiple methods to valuate your business, this will ensure no one method skews the results, leading to an inaccurate valuation)
To read some more about basic tips to consider when selling a small business read this article titled "7 Steps To Selling Your Small Business" from Investopedia.
If you are interested in following my blog consider subscribing by email.
If you are currently looking to sell your small business consider checking out our Business Valuation report service. Our Business Valuation Expert has experience valuing over 100 different companies from various industries.