Creating, developing, and making a success of a retail small business can be a very personally and professionally satisfying achievement. Profitably selling that business can be an equally rewarding experience. Assuming you’ve decided to sell your business because business is booming and sales are skyrocketing, there are still a number of things you may want to consider to determine the best time to sell. Whenever you make the decision to sell your retail business, there are several steps to ensure you get the best price possible for it.
When to Sell
To help you decide on the exact right time to offer your business for sale, one consideration may be the future prospects of your business. You may want to talk with a business consultant to help you gauge the state of your industry and assess where your business is likely to be in five years. If the odds are good that your business will substantially increase in value over the next few years, you may want to hold off for awhile on offering it for sale. On the other hand, if a major highway being constructed is going to funnel business away from your location, you may want to sell before a drop in foot traffic leads to declining revenues.Your plans for what to do with the money you realize from the sale may also influence your decision. If your plan is to reinvest in a new business, when you determine the best time to make that investment will impact your decision on the best time to sell your current business. If you’re looking to use the sale proceeds to fund your retirement, you may want to meet with your financial advisor to get an assessment of whether the money you receive from selling your business is going to be adequate to keep you financially comfortable in retirement.Regardless of exactly when you decide to sell your business, you’ll do better at getting a good price if you plan the sale well in advance, at least a couple of years. You can usually get a higher price if you have the luxury of waiting for the best offer, and planning the sale in advance gives you time to take steps to maximize the business’ value.
Maximizing Your Sale Price
Among the preparations for selling your small business, one is getting an appraisal. You can estimate a value for your business by looking at its assets or its sales, but you also need an independent business appraisal. You want to get appraisals from more than one business valuation company because there can be substantial differences in the value assigned to your business by different firms. Consider using a broker for the sale to ensure fair treatment and proper legal procedures for both you and the buyer.One long-term preparation you might make is hiring entrepreneurially minded employees who may be inclined to think about someday buying the business from you. This can make for a relatively quick, easy sale without much difficulty in getting a fair price.Take steps to brighten your company’s financials, such as collecting past due accounts receivables and cleaning up your inventory. Have extensive documentation of your business’ assets, inventory, customer base, and supplier information, in addition to basic records of profits going back several years to show prospective buyers. Include any long-term contracts that guarantee income for the business.The best time to sell your retail small business is when it has been performing at a high level and future prospects look good for enduring profitability. Whenever you decide to sell, you can command a higher price by taking steps to maximize the value of your company.