The current pandemic has put the world on pause and has affected businesses, both big and small. Most business owners in the USA are 60 years old. If you are one of them and you are considering to retire, you are not alone. Rebuilding your business after the pandemic can take more energy and time than you can muster. Selling your business and cashing in now seem so attractive.
You might be worried that selling a business now is a bad idea, but you have nothing to worry about. No matter the market situation, investors with capital are always looking for new business opportunities.
If you have temporarily closed your business because of the pandemic, you might have a difficult time positioning yourself for a sale. However, if you have recently reopened after restrictions have been lifted, you still have the opportunity to prime your business for a sale.
1. Get specific on your reason why you want to sell your business.
Different business owners will have various reasons why they want to sell their business. If your primary reason is that you want to retire at your age, own it. Rebuilding a business after a crisis can be draining. You need to invest more time and money for your business to recover. If you feel like you do not have the energy to sustain the recovery of your business, consider selling it at its current value.
2. Clean up your books.
If you are now firm in your decision to sell your business, it’s time to clean up your financial activities. Avoid activities like using your company to pay for your expenses. Get your accountant to clean up your books. This will allow you and your prospective buyers to see the actual performance of your business.
3. Review your business continuity plan.
Your prospect will want to know that your business is ready to run even in a crisis. You can consider adjusting your business model to ensure that it can run smoothly in a pandemic, even without you. Improve your operations if you believe it is needed. After you have implemented the changes, take a leave and see how things go. Assess how your business manages, and fine-tune any processes that need improvement.
Every investment you make in improving your business processes to make it more resilient can affect your selling price. Make sure to document the changes that you have made and how they have improved your numbers and performance.
4. Improve your business.
You can do the following things to improve the valuation of your business:
- Outsourcing of functions to decrease operational costs and enhance operational resiliency
- Use of technology, such as cloud-based databases, to allow remote work set-up
- Perform financial planning and forecasting
5. Create an exit plan.
You’d be surprised by how many businesses do not have an exit plan. An exit plan or strategy can include acquisition, mergers, or shutting down some operations. It gives you a way to make a substantial profit when you exit or sell your business.
6. Manage your expectations.
It will be too optimistic to assume that the valuation of your business will not be affected. Experts predict a buyer’s market, where estimates for most companies will be lower than usual. However, business owners who will be able to reinvent and revamp themselves can maintain their value or even improve it.
Some buyers will be wary and more cautious, and they will be looking more closely into your books and risks. That’s why it is essential to have comprehensive documentation of the improvements that you have implemented in your business to assure prospective buyers.
7. Hire a reputable business broker.
A reputable business broker can sell your business for you. Hiring a broker will allow you to focus on your business operations and how you can improve them. Your broker can help you determine a fair selling price. They also understand how to market your business to attract serious and interested buyers. They have years of experience that allow them to anticipate any issues ahead of time.
The pandemic is a scary time for everyone. The impact it has made on businesses has affected millions of livelihoods, not just in the USA but worldwide. Learning how to sell and buy a business the right way is crucial. Nobody knows how long this pandemic will last. However, there are still many opportunities to sell, and your business must be ready to make a good and profitable deal.