3 Crucial Questions to Answer Before Selling Your Business

If you’re a business owner, it’s essential to realize that at some point, your business will change hands. This transition can be a pivotal moment, both emotionally and financially. However, many owners find themselves unprepared for this eventuality. In this article, we’ll delve into crucial questions every business owner should ask themselves long before deciding to sell.

Why Am I Selling?

The decision to sell a business is monumental, and it’s imperative to understand the underlying motives. Are you experiencing burnout? Is your industry known for its demanding nature? Perhaps your business has hit a plateau, or it’s no longer as enjoyable as it once was. Discuss your thoughts with someone experienced in business matters to gain valuable insights. Remember, this decision is not only financial but also deeply emotional. Understanding your reasons for selling will guide you towards the right path.

What’s Your Business Worth?

It’s surprising how many business owners are unaware of the true value of their most significant financial asset—their business. While you may have a good grasp of your home’s value, savings, or retirement plan, the value of your business often remains a mystery. Overestimating its worth is a common trend among business owners.

To avoid making decisions on shaky ground, seek professional advice. Business appraisers or qualified business brokers with Certified Business Intermediary (CBI) designations can provide accurate estimates. Generic software packages may not account for the unique aspects, market conditions, or political factors that influence your business’s value.

Understanding the true worth of your business is the cornerstone of any successful sales strategy.

Are Your Documents in Order?

In the realm of business sales, organization is key. In fact, it’s one of the main reasons businesses fail to sell when they first hit the market. Ensure that all your documents are in impeccable order. This includes financial statements, tax returns, payroll records, certificates of good standing, contracts, leases, licenses, and more.

Create a comprehensive and easily accessible list of assets and liabilities, covering both tangible and intangible aspects. Don’t forget to include a detailed inventory. Well-organized paperwork not only facilitates a smooth sale process but also instills confidence in potential buyers.

Selling a business is a momentous decision that demands careful consideration and meticulous preparation. By addressing these crucial questions well in advance, you’ll not only enhance the value of your business but also pave the way for a seamless transition. Remember, knowing why you’re selling, understanding the true value of your business, and having your documents in order are pivotal steps towards a successful sale. Don’t leave these crucial matters to chance; start planning today. Your business’s future depends on it.

Interested in Buying or Selling a Business?

For expert guidance and assistance, reach out to our Managing Partner, Greg Johnson. With credentials as a Certified Practicing Accountant, Certified Exit Planner, and Business Broker, he’s equipped to help you navigate the process seamlessly.

Contact Greg Johnson today!

Contact Ascend Business Partners today on 03 8794 7777 or ascend@ascendpartners.com.au to have a discussion about your business and financial goals. Or simply book a free 1-hour “Time to REFIRE” workshop with Greg!