As a business owner, selling a business is a major decision—but figuring out the right timeline can be one of the toughest parts of the process. Let’s discuss some considerations you should take into account when planning for the sale of your business.
Preparing Financials
In my experience as a business broker, one of the first things buyers ask for when considering a business for sale is a review of its financial statements. It’s common for small business owners to mix personal and business expenses, and while these can be “added back” to create an adjusted financial statement, doing so can erode buyer trust.
Buyers feel more confident when they see clean, accurate financial records, as it demonstrates that the business is well-managed and transparent. My advice to sellers is to plan ahead: start keeping financial records that clearly reflect the true performance of your business in preparation of the sale, whether that’s 1 year in advance or 2 years in advance. This preparation can make the sale process smoother and help you command a better price.
Personal Affairs
Selling a business takes time, so it’s important to consider your personal reasons for selling when planning the timeline. Depending on the type, industry, and size of your business, finding a buyer and completing the sale can take anywhere from a couple of months to over a year. Whether you’re retiring or pursuing other ventures, make sure you plan around these timelines and give yourself enough time for a smooth sale.
Contracts
If you have a contract-based business, it can be beneficial to plan the sale around the timing of new contracts—especially key contracts that could significantly increase the value of your business. Aligning the sale with these contracts can make your business more attractive to buyers and potentially justify a higher asking price.
Business Readiness
In most cases, a turnkey business—one where the buyer can seamlessly step into the role of owner—is more attractive to potential buyers. Businesses that are well-organized, with clear systems and processes in place, reduce the learning curve for new owners and increase buyer confidence. Businesses with a strong management team in place are even more attractive to buyers. A capable team ensures that the business can continue operating smoothly without heavy involvement from the owner, which reduces risk and makes the transition much easier.
Have questions about selling your business? Contact me for a free consultation!