7 Important Questions to Ask Yourself When Selling a Business

The decision to buy or sell a business is one of the most important professional and financial decisions a person will make. Here is a guide of questions to ask yourself when considering the sale of your business.

1. What is really for sale?

You’ll need to determine what is, and is not, for sale. Notably, is the premises included in the sale.

2. What assets bring in revenue? 

It’s important for you to consider what assets are productive or essential to business operations – i.e what assets can be sold independently from the sale of the business.

3. What is proprietary?

Buyers and sellers alike will want to consider what is proprietary. Anything from software and patents to formulations can be extremely valuable. Sellers will want to give substantial thought on how to best frame any proprietary property that they have in the best light. Buyers will want to carefully evaluate proprietary property to try to ascertain an accurate value. Outside experts may be needed to make an accurate assessment.

4. What’s your competitive advantage? 

You must understand your competitive advantage, whether it is a niche, superior process or product, better marketing or a range of other factors. Properly framing your competitive advantage ensures buyers see the full, and even untapped, value of your business.

5. What is your growth potential?

The growth potential of a business is an essential factor for buyers. Hence, you should optimally position the business for scaling and/or expansion opportunities.

6. What agreements do you have in place?

Employee agreements, non-competes, and the depth of management are all areas of concern for a prospective buyer. Buyers will want to consider if the seller has secured agreements from key employees and how dependent the business is on an owner/manager.

7. What relevant financial information will a buyer want to know? 

It is valuable for you to consider the buyers perspective; what would you think of your business if you were the buyer and what questions would you ask?

In short, a buyer will request a complex list of financial information such as financial statements, monthly P&L’s,  a list of assets and a schedule of accounts receivable and payable.

An experienced business broker or M&A advisor will help guide you along with buyers towards an optimal outcome.


Copyright: Business Brokerage Press, Inc.


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