Do you own a business, and are you thinking about selling it? Experts estimate that it takes between six to eight months to sell a company. So whether you’re planning to retire or you just want to move on to your next venture, here are a few things to keep in mind before you put your business on the market:  

Choosing the Right Time

LinkedIn notes that entrepreneurs decide to sell their companies for different reasons: they think it’s time to retire, they want to try something new, they’re relocating, or maybe their health situation has changed. In all cases, it’s best to sell your business when it’s performing well and when its value has increased, and when the amount of money you’re being offered for it outweighs your projected earnings. So if you want to spend more time with your family or to go on a year-long adventure away from your desk, selling your business may get you all the financial freedom you crave.

Creating a Thorough Contract

It's crucial to draft a contract that meticulously outlines the terms of the sale, including the sale price, the deadline for the final payment, what exactly is included in the sale, and all other conditions. By ensuring these details are comprehensively covered, you'll be ready to create your own contract that becomes formally agreed upon and legally binding once signed by both parties. For added peace of mind and to safeguard your interests, consider consulting an attorney to either assist in creating or review your business sale contract.

Doing a Business Valuation

Just like you’d want to assess the value of your home before putting it on the market, you want to figure out what your company is worth to make sure you get the most money for your life’s work. So hire a professional to analyze your business’s financial statement and capital structure, and take into account your tangible and intangible assets. A company providing valuation services will also compare your business and its revenue with your competitors’ to assess its value as accurately as possible.

Forecasting Business Performance

Being accurate in your sales forecasting will help raise a potential buyer’s confidence that they are making the right decision in buying your business. Being too optimistic and failing to deliver or, conversely, showing a bleak picture of your company’s future will deter people from going through with the buying process. MarketingTutor.net advises knowing where your company is positioned on the market by comparing and analyzing data gathered during the years you’ve been in business. Have all your books and financials in order, and clean up or correct any discrepancies to put your company in the best light possible.

Finding Advisors Vs. Going it Alone

Some business owners assume they can save both time and money by selling their companies alone. But just like in the case of selling a house, going the for-sale-by-owner route often leads to more problems and headaches. Bringing in a third party will help take your emotions out of the equation and help you assess the value of your company more objectively. And working with a mergers and acquisitions advisor can help you find the right buyer and save you valuable time in the process.

Selling your business may be one of the most life-changing events in your life in terms of money and finances. So when the time comes, make sure you do your due diligence and maximize the value of your company to honor your legacy.