While selling your business involves numerous steps, here are the essential 10 Steps To Sell Your Business Successfully. As a business owner, when you plan on selling your business, there are numerous considerations in anticipation of the sale. To sell your business, these considerations include:
- Protecting the confidentiality of your business
- Maximizing sale exposure through marketing
- Qualifying prospective buyers
- Enhancing the value and presentation of your business
- Getting the best price possible
- Choosing the right brokerage to represent you
Hiring the right business brokerage is the single greatest decision that you will make to increase both the value of your sale and the likelihood of your business selling. Optimally, you will want a business brokerage that has an experienced team of business brokers committed to representing your interests during every stage of the business sale process and leading to successful outcome. The following are the essential 10 steps to sell a businesses.
10 Steps To Sell Your Business Successfully
STEP 1: Business Valuation
A business valuation determines market value and whether your business is positioned to sell or whether exit planning would be more appropriate for an eventual sale. Learn more about business valuation here. Mission Peak Brokers provides complimentary business valuations. If you would like a free valuation, contact us.
STEP 2: Listing Agreement
Once we agree on value and timing of sale, we enter into a listing agreement. In this contract, you hire Mission Peak Brokers to represent you in the sale of your business and give us the right to market your business for a specific period of time, a specific price, and terms and conditions.
STEP 3: Package Your Business For Sale
The next major step is gathering and organizing all key documentation regarding your business and complete additional listing documents that will be presented to prospective buyers. We will request documents pertaining to financial, operational, personnel, etc. records. We take all the information that you provide and prepare marketing materials to profile your business assets. We will prepare a detailed business profile for the marketing campaign that reflects all key aspects of your business.
STEP 4: Market Your Business For Sale
With a properly packaged listing ready for marketing, Mission Peak Brokers creates a market campaign for your business. We confidentially target specific buyers through emailing our substantial buyer email list and market to the general public through various online business sale websites. While we maximize marketing exposure for your business, we maintain strict confidentiality of your business. Your business is not revealed until after a buyer is properly vetted and disclosed.
STEP 5: Screen Prospective Buyers
We respond to all initial buyers who are interested in your business. Before receiving your confidential business information, Mission Peak Brokers requires each buyer sign a Non-Disclosure Agreement (NDA). We also assure that prospective buyers are qualified & financially able to buy your business. When a buyer is ready to be disclosed to you, we will contact you to schedule a seller interview.
STEP 6: Seller Interviews
Mission Peak Brokers schedules seller interviews at your convenience after reviewing the business profile and financials information. If the buyer is further interested, buyers will want to tour your business. Meetings are usually discretionary to avoid premature disclosure to employees and customers. This is the buyer’s opportunity to tour the facilities, ask questions and find out more information on what it would be like to own the business.
STEP 7: Negotiate Purchase Contracts
Mission Peak Brokers presents you all offers and negotiates on your behalf. Appropriate negotiation is critical to achieve a successful sale and a favorable outcome for both seller and buyer. From our experience, we have the expertise to effectively negotiate on your behalf.
STEP 8: Due Diligence
The purchase contract indicates the initial phase of the contract for due diligence which is the phase in which the buyer and seller investigate to assure and verify the claims made for entering into contract. Mission Peak Brokers coordinates the due diligence process. Buyers typically examine the business along with their professionals such as accountants, attorneys, inspectors, etc. Buyers request any and all documents and materials they need to verify all representations made by the seller are accurate. This phase typically takes 2-4 weeks. Once due diligence concludes, buyers will release contingencies and then a formal business escrow will be opened. If seller financing is involved, sellers will perform due diligence on the buyer to assure that they are creditworthy.
STEP 9: Transaction Management
Once in escrow, the process essentially involves the clearance of any sellers’ obligations pertaining to taxes and liens on the business, the buyer securing financing, obtaining landlord approval for the transfer of the lease in order to exchange financial proceeds for the title of the business. Mission Peak Brokers coordinates with the principals and their advisors, landlord, lender, and others to assure that all necessary paperwork is completed on time.
The parties coordinate the transfer of merchant service accounts, inventory counts, alcohol or other special license transfers. Once all transfer items are completed closing documents are prepared for signature and a formal closing is scheduled for signature, notarization, the transfer of funds and ownership.
This phase can take anywhere from 1 to 3 months depending on the lender’s timetable, complexities involved with transfer issues and buyer’s efficiency in coordinating all the necessary information to complete the process. During this time, the buyer also forms a business entity such as a corporation or LLC to receive the business if they are not going to operate as a sole proprietor.
STEP 10: Close of Escrow & Change of Possession
Once escrow closes, the parties coordinate the transfer of utilities, online assets, various business services, etc. The buyer obtains all necessary licensing, insurance, business bank accounts, etc. The seller will introduce the buyer to the employees as the new owner. The parties will also have negotiated a time period for training the buyer for on-boarding onto the business which is usually a period of 2 weeks with any additional time usually as a paid consultant or employee.