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Three Questions To Ask Before Selling Your Business

Three Questions To Ask Before Selling Your Business
By David Inabinett

Operating a business in any industry is hard. Operating a successful business is even harder. As a business owner, you have to make difficult decisions every day. Whether your operating a brick and mortar location or ecommerce site, selling your business or company does not have to be difficult.

Questions to Ask Yourself

  1. Do you have a plan?

You will need to have a plan and clearly defined goals set in place before you start the process of selling your business or company. There are lots of things to consider when selling a business:

  • price negotiation
  • time frame
  • legal assistance
  • help from certified financial experts

There are pros and cons to every business deal. Following a plan or guideline will help you determine the best possible option.   

2. When is the right time to sell?

Timing is key when selling your business. Knowing and understanding when the market is up or down is an important part of selling your business. Selling at the right time and you can set yourself and your family up for the future. Selling at the wrong time can hinder the financial growth you have worked hard to build.

3. How much is my business worth?

Knowing how much your business is worth ins not only important for you but important for buyers too. Potential buyers will want to know much your business is really worth.

  • Is your business making a profit?
  • Are you breaking even?
  • Are you overextending your services or products?
  • Is your business relevant in today’s quickly evolving market?
  • What are the customary industry standards in valuing your business?

You will also need to be prepared to answer questions from potential buyers. In doing their due diligence a potential buyer is likely to request information relevant to the history of your business, the valuation of the business, and how it was determined. Following required business formalities and documentation will be important in the preparatory stages so a potential buyer finds these items in order during due diligence.
Finally, what type of financing structure would you be willing to accept from a buyer if they ask that you fully or partially “owner finance” the purchase of your business or leave open an option to purchase real estate during rental of the property where the business is located.

These are all things you should consider during the process of
planning for the selling of a business.

Things to Keep in Mind

You have spent your entire life overseeing, growing, and managing the day to day aspects of your business or company. Now it is time to sell and hand over the business to a person, group, or entity.

What happens next?

We recommend you start the process by speaking with a business law attorney before you move forward. Contact us to schedule an appointment with one of our business law attorneys.

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