After owning and running your company these past years, you have achieved many of the goals you once had to create a successful enterprise. The day has now arrived when you decide it’s time to move on to retire or create another opportunity with a different business. If you don’t have a desire or the ability to sell to your employees or hand the reins over to family members, the option to market your business in the public arena is a viable one.

The upside to an open market sale is that you can potentially realize top dollar from a competitor or new entrant and walk away from the deal with 100% of the proceeds in your pocket. However, there are a few roadblocks to consider that may get in the way of a smooth transaction. You need to manage these carefully while not losing sight of the overall end game of a successful sale. Here are a few things to consider:

Should You Engage with a Business Broker?

No one knows more about your company’s history and future growth potential than you do, however, selling your company requires a lot of time to prepare and market on your own. Selling companies is a business that requires certain experience and expertise you may not have, and the additional time to handle this without assistance can be overwhelming.

Consider researching business brokers who are familiar with your industry and company model, while gathering the internal data they will need to understand how best to sell your business. If you find someone you believe can greatly increase the odds of a successful sale, you can formally engage them to represent you in the open market. Having a reputable business broker working for you can give you a layer of independence and added credibility while potentially reducing the time it takes to realize a sale.

Obtain a Formal Company Appraisal

Another level of unbiased independence can be gained when you have a business appraisal completed by a certified professional. This step should be completed in the early stages of marketing so you can present the report to potential buyers and your broker if you’ve engaged with one.

In summary, selling your business in the open market is an exciting opportunity that comes with challenges that are best faced with a level of independent support that maximizes the chances of a successful outcome. Consider all the options you have carefully to determine what will work best for you.

As a business owner, there will come a time when you begin to consider selling the company, hopefully after years of growth and prosperity. Whether you are eyeing retirement or thinking of shifting your career path, you will need to determine the ideal exit strategy for the company and explore the options available to you. Here are a few to think about:

Internal Sale to Key Employees

You have likely built lasting relationships with some of your top personnel who have been loyal over the years and helped you build the business up. An internal company sale to employees who are ready to take on the additional responsibilities of ownership will avoid the extended time and risks of an open market transaction. This will also instill confidence in all your workers that you intend to keep things as consistent as possible during this transition and in the years to come.

The downside is that you may need to develop an affordable seller financing package that allows the employees to pay you over an extended period of time.

Engage with a Business Broker

You should be able to research the market and find a couple of business brokers who specialize in selling companies to other third parties in your industry. This process will probably involve considerable time and expense, however, the end result may be worth it. Make sure you conduct a thorough background check and interview process before committing to a company as you will be heavily reliant on their ability to successfully complete a sale which may take several months or even a year or more to finalize.

Develop your own Marketing Plan and Sale Strategy

If you have a lot of industry contacts and feel confident that you can manage the process independently, consider taking the time to develop a strategy to market your business solo. If you strongly believe you have the knowledge and experience, as well as the time, and understand the risks involved in this kind of venture, you might be best served to sell the company yourself, relying on the fact that no one knows your business better than you.

You should have your accountant, attorney, and any other key advisors involved in the process to mitigate risk and avoid miscommunicating information to potential buyers. This option has the most upside potential but higher downside concerns given the independent nature of the transaction.

In summary, this decision will be one of the most important ones in your life so take plenty of time to consider your options and seek advice as needed.

Retirement can mean many different things to people who come from a multitude of family and career backgrounds. If yours involves owning a small business, there are some consistent mindsets and potential options ahead that are in tune with other proprietors nearing this phase of life. Here are a few to think about:

Keep it in the Family

If you’ve been fortunate enough to have one or more family members working with you over the years, there is the opportunity to sell the business while keeping it close to home. Consider who has the best makeup to take over the company, whether it be a sibling, child, or another relative who has been with you and knows the business inside and out.

Train Existing or New Employees For Replacement

One or more existing employees may have an interest in acquiring the business. If so, it may make sense to consider one or more of them under a buyout option. You may need to finance the acquisition in this case, either through a fixed loan or a percentage of the monthly revenue. If no one is senior enough to take over, consider looking outside for seasoned talent who can quickly learn the ropes and assume the leadership role.

Hire a Business Consultant for an Open Market Sale

There are experienced consultants who know your industry and could take a lot of the pressure off you while marketing your business to competitors and those looking to enter the market. This process may take several months, however, you can put the terms in place you’re comfortable with and negotiate a fair price with the support of reliable third parties.

Part-Time Transitioning

In any of these possible scenarios, it might make sense to consider a phase-out plan over a couple of years or so, in which you remain actively involved in the day-to-day operations on a part-time basis to ensure a smooth ownership transition, especially if you’re involved in the financing of the sale. It’s difficult for many small business owners to say goodbye to their company and the people they have worked with, so this might be a nice way to manage the process.

After years of creating, developing, and growing your small business there will ultimately come a time when you determine the next best course of action is to sell, whether that be in the open market or in a private transaction between employees, family members, or current investors. In all of these potential scenarios, there are a few things to include in the early stages which will give you the best opportunity for a successful outcome. Here are some of the more critical steps to consider:

Accounting Records and Client Files

Work with your bookkeeper, accountant, and/or controller to ensure all internal documentation is current and organized. These records will need to be accurate, easy to understand, and accessible to both you and potential buyers during all phases of the sale process.

Obtain an Independent Valuation

There are sure to be differing opinions on the overall value of your business. Subjectivity and personal feelings can’t be a factor in determining a reasonable and fair assessment. Look to engage with a certified and accredited appraiser who can work with you and your support team to develop a credible, defendable valuation of the company. The earlier you engage in this effort, the more control you will have in the process.

Hiring a Consultant or Business Broker

If the sale is on a private level with the buyers already identified, such as in the case of an employee purchase or family generational transfer, you will want to consider working with an independent business consultant who is familiar with these types of transactions. Try to avoid hiring someone you know personally or through other business dealings as it can create doubt as to their objectivity.

If you are going out into the open market in search of potential buyers, you should think about working with a business broker who can guide you through the process and take on much of the workflow involved in getting a sale completed. They will act as your exclusive representative and offer benefits in the way of identifying the right groups of purchasers and negotiating fairly on your behalf.

Make sure they have experience in your markets and industry and have a reasonable commission plan that isn’t too expensive. Don’t hesitate to research typical broker plans and interview a few different companies before you decide who to engage.

In summary, regardless of whether your business is being sold at a private or public level, the process can take several months to complete, therefore, the more you accomplish and set up in the first weeks will lead to a more efficient timeline and effective conclusion. All the years of hard work you’ve put in getting to this stage will reap its rewards with a sound game plan to successfully sell your small business.

It doesn't matter whether you're getting ready to sell the business you've put your blood, sweat and tears into for decades or are simply ready to move on to your next big entrepreneurial adventure. When you're preparing for a business sale, a lot of business owners tend to skip right to the chase, simply listing the business for what it's current value is. But what if you could start by learning how to sell your business the right way, the way that would maximize your profit on the sale to get the best return on your investment during the final few months or years of operation? Here's a quick look on how to do it right.

What's involved when you're preparing for a business sale?

Unfortunately, when many businesses decide to close their doors, it happens after many years of dedicated ownership and hard work. At the point that the decision is made, many business owners just want to get done with the process. This is one of the worst approaches to take, as it means you lose some solid potential profit. Why? Consider how you've started running and building your business.

Did you build your company based on a lot of emotional decisions or did you spend some solid time studying the figures, looking at what made sense and going with what would work? Why would it make any more sense to shift from that approach now that it's time to sell your company? By taking the time to go through the process logically and thoughtfully, you can benefit from an increased sale price and better overall profits.

One of the best ways to go through this process is by starting out with a preliminary business appraisal. When you have a business valuation performed, the appraiser takes a solid look at your company's finances, assets, liabilities and overall condition. The appraiser will provide you with that information through a written report, which provides you with valuable insights into your company's current condition. But how does that impact your company's value?

Imagine that your business has a great reputation for innovation, but has a high level of bad debts in its accounts receivable or high overhead costs. When that shows up in your valuation report, you have the option to change those issues. By keeping your high points where they are or making them better while improving the rough patches in your company, you can quickly improve your company's overall value, allowing you to greatly benefit from the change at the time of sale.

You can then use the original valuation report and have a second report run after you've made changes, which helps you track how much the value of your company has improved. This, in turn, allows you to decide whether you want to make additional improvements or whether it's time to make the sale from an educated standpoint. 

By knowing what to do to get the most from your business, you can make a huge difference when you're preparing for a business sale. Take the tactics used by successful entrepreneurs everywhere whose companies sell for more by having a business appraisal performed. Make sure to check whether your business valuation specialist has gone through a certification process, as this ensures that they have an excellent mix of education, knowledge and experience to put to use for your business sale.