How to Prepare Your Business for Sale

The market for buying and selling businesses is flourishing as many baby boomers are nearing retirement age and putting their businesses up for sale. Selling a business is a process in itself but various steps need to be taken before even placing a business listing on the market. Here are five steps to prepare your business for sale:

• 1. Select a Business Broker

• 2. Prepare Your Financials

Locate your financial records, organize them and make sure all of the numbers add up. These financial documents will be a key component in the sales process. Potential buyers will want to see these documents as well as lenders who want to see if the business is in a healthy position and credit worthy when it comes to financing a loan for the business purchase.

• 3. Prepare Your Physical Business for Sale.
  

Appearances are everything. You only get one chance to make a first impression. Be sure your business is clean and organized. Make necessary repairs and updates. Potential buyers will be attracted to a business where they won't have to put in too much work right off the bat when taking over.

• 4. Get Your Business Pre-qualified.

Getting your business pre-qualified for financing is attractive to both buyers and lenders and gives your business instant credibility. Getting pre-qualified shows your business is in good standing and is credit worthy. For potential buyers, a pre-qualified business may make their loan application more favorable.

• 5. Establish Your Business's Value

An important part of the sales process is establishing the business's value. Do not let your emotions get involved when trying to come up with a value. You have invested a lot of time and effort into your business. Make sure it is priced sensibly. The price you settle on needs to be backed up by financial documents. Be aware that pricing your business too high may scare off potential buyers and pricing it too low will leave you short changed. You also want to have your business competitively priced or be comparable to similar business opportunities for sale in your area. A business broker can help you establish a proper value for your business.