1. Make sure you have a valid reason for selling your business. The first thing a prospective buyer will want to know is the reason you are selling. The more valid the reason you offer, the more serious the buyer will be.
2. Don't wait until you have to sell, for either economic or emotional reasons. You don't want anxiety to force you into accepting a deal that's not good for you or for the buyer.
3. Once you have made the decision to sell–and before talking to your business broker–you should gather the information needed to market and subsequently sell your business. Here's the list of key items:
- Three years profit and loss statements
- Federal income tax returns for the business
- List of fixtures and equipment
- The lease and any lease-related documents
- Copy of the franchise agreements (if applicable)
- List of loans against the business with amounts and payment schedule
- Copies of any equipment leases
- An approximate amount of the inventory on hand
- Names of outside advisors
4. Remember that you are part of the marketing team. Your business broker can't do it all–and might even ask you to come to an office meeting to tell the rest of the staff about your business. Follow your broker's advice about dealing with prospective buyers–there's a right and a wrong time to meet them.
5. Confidentiality works both ways. The broker will constantly stress confidentiality to the customers to whom he or she shows your business. However, as the seller, you must maintain confidentiality about a pending sale in your day-to-day business activities.
6. You, as the seller, should put yourself in a prospective buyer's position. The next time you go to your place of business, pretend you are a buyer looking at it for the first time. How impressed are you?
7. Just because you are selling, now is not the time to let the business slip. It's important that prospective buyers see your business at its best; bustling, and showing no signs of neglect.
8. Engage an outside professional who understands the sales process. If you are going to use a lawyer, use one who is seasoned in the business sale process.
9. Be flexible! You need to keep the ball rolling once an offer has been presented. Study it closely. Just because you didn't get your asking price, the offer may have other points that will offset it, such as higher payments or interest, a consulting agreement, more cash than you anticipated or a buyer that you are comfortable with.
10. Remember that most successful transactions are successful because they create a win-win situation for everyone involved.