Five Questions To Ask Before Selling Your Business
After the initial conversation, what are the questions to ask before selling your business?
1. Is my business ready to sell?
The normal requirement is to have three years tax returns available which establish an income and expense pattern.
2. What information and professional services do I need as I get ready to sell?
You may need an appraiser, financial planner, attorney and definitely an unbiased third party to help locate Buyers and facilitate the sale.
3. Is the market right for me to sell?
You know your industry the best for your marketplace. The key is to answer this question from an unbiased viewpoint. A business intermediary has access to local and national sales relative to your business sector.
4. Could my business continue to thrive without dependence on me personally or a key customer?
A solid business should be able to operate when the owner is away for short periods of time. It should also have a diversified revenue stream not based on one specific contract or customer.
5. Are there any potential “deal breakers” from your point of view?
Make sure all decision makers/owners are open to selling. Make sure your intellectual property and/or real estate is clear to sell or lease. Try to resolve all pertinent issues before your business goes on the market.
As the business owner, you know your business better than anyone. Because of this, you probably have a laser focus on most aspects of the business. Don’t make the mistake of thinking you can handle a sale transaction on your own. Take these five questions to ask before selling your business to a professional and confidential business advisor. They can provide you the thousand-foot view as well as focus and analyze your potential sale from many angles. Professional advisors will also be able to be objective and leave the emotions out of the decision making process. Consider this advisor as your personal business coach to help resolve any issues that might arise and end up costing you financially.