When you’re considering selling your business, you need to consider all the details. The process can be long, expensive and emotionally draining. It also involves the transfer and ownership of assets which require lots of documentation.
Generally, the size of the business determines whether it can be sold as an independent company or through an intermediary. Brokers are typically used to sell smaller businesses as their buyer pool is more limited. No matter the size of your company selling is a complex process that requires careful planning and preparation.
An appraiser who is qualified will give an in-depth report and supporting documents to determine the value of your business. This valuation is usually calculated using the multiple of the annual net income or revenue. The number of times this will differ depending on the type of business and industry, and is the starting point for determining your selling price.
Before selling, ensure your financial records are in order and your inventory of equipment is up to date. You’ll need three years worth of tax returns as well as financial reports for any potential buyer to review. These documents will speed up the selling process.
During the negotiations, buyers can ask for various conditions to be included in the contract. Salary guarantees, stock payouts or ownership stakes, and thedatarooms.blog/best-way-to-send-secure-documents other terms are frequently requested. You might want to seek the assistance of an accountant or lawyer before agreeing to any terms because they can provide a detailed explanation of how these terms affect the profit you earn from selling.