7 Steps Every Owner Should Take Before Selling Their Business

Building a business can be a rewarding but challenging process that requires careful planning and execution. It's essential to consider the company's and one's future, including preparing to sell a business. Selling a business also requires careful planning and execution, and while it can be overwhelming for one person, resources are available to assist. Follow the steps listed below to transition out of business ownership and prepare your company for the market.

Clear the Clutter.

While your company may be doing well on its own, producing profits with few hiccups along the way, more is needed. Consider how your company appears to a potential buyer or investor. What will they see, both physically and financially? A little housekeeping goes a long way. The key is to clean the house, both physically and financially. This includes having clean, accurate, and truthful financials and tax returns.

Form a Group.

Entrepreneurs are often go-getters and do-it-all types of people, but to position your business for sale, you must ensure that you have built a team around you that is not reliant on you doing or controlling everything. What would happen if you went missing for 30 days without notice? If the business stalls or suffers, you must focus on reinforcing those areas so that they can operate with employee and manager oversight without relying on your daily guidance.

Think as a Buyer to Consider the Value.

Selling a business is similar to selling a home in that sellers frequently want to ask for far more than the property is worth due to emotional attachment or personal investment value. You must consider the value of your company from the buyer's point of view: what exactly are you offering here, and what is the ROI on their purchase?

If you are searching for a local, knowledgeable business broker to sell my company who can help you determine the fair market value and market multiple for your business, we will ensure that it is priced appropriately. Remember that the price of your business is not determined by how much blood, sweat, and tears you've put into it. It will most likely be based on a three-year weighted average seller discretionary earnings (SDE) market multiple.

Maintain Management's Focus on Business

A focused management team is a huge benefit for any company. Yes, even when trying to sell a business, day-to-day operations must continue. If you handle the sales process properly, most, if not all, of your employees should be unaware that the company is for sale. To accomplish this, your team must be completely focused on business operations rather than potential sale negotiations.

Everyone has heard stories about last-minute game changes and dealbreakers, and if your team is already out the door, your business will suffer and your valuation will fall. This is why hiring a professional team is critical so that you can focus on keeping the business running and trending in the right direction while your advisor team handles all aspects of selling your company.

Assemble Your Advisor Team

Putting together the right team may be the most important thing you can do to improve your chances of selling your company. A knowledgeable Sell My Business broker, transaction attorney, and tax advisor who handles business exit planning will be required.

Selling your business is a complex and significant task that should not be attempted on your own. It is crucial to engage professionals specializing in business sales, such as attorneys and accountants, as well as Buy Sell Business Canada brokers, to ensure a smooth and successful sale. Their expertise can help you navigate legal complexities and guide you through the negotiation process, ensuring that your future retirement funds are not at risk. Therefore, it is essential to seek their advice and guidance to ensure a successful and efficient business sale.

Consider the Tax Consequences

Before you even consider selling, you should think about the tax implications that will arise both during and after the transaction. It will be critical to rely on financial advisors, and your current CPA may or may not be the right person for the job. Working with someone who specializes in tax strategy and planning for business owners looking to exit is preferable to working with someone who has filed your business tax returns for the last few years and may not specialize in this work. Some tax strategies must be implemented before closing the transaction, so don't put it off and think you can do it later.

Make a Financial Plan.

You must consider how you will live and manage your finances after you sell your business in Canada. Will you be surviving on the proceeds of sales? Are you starting a new business? You must ensure that you understand how to manage your finances after the sale so that you are not caught off guard by something that arises along the way.

Just as important, you must have a goal that will bring you fulfillment and joy. To be honest, many business owners who retire to play golf and relax on the beach end up bored and unsatisfied. Make a plan for how you will be productive and fulfilled in your post-transaction life.

Conclusion

Remember that selling a business is a major undertaking that can take time. Careful planning and attention to detail at each stage will increase the chances of a successful and profitable sale. Finally, follow these seven steps, and you'll be ready to sell your business in Ontario whenever the time comes.