When Is The Right Time To Sell A Business? Article

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When Is the Right Time to Sell a Business?

Author: Manuel Salvacion

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Selling a business that you have put up, nurtured, and developed through time may be a sad thing. However, for some reasons, people choose to sell their businesses in the hope that it could still turn greater profit in the hands of another.

Deciding when to sell a business is difficult. You have to consider many factors before you can be able to finally give the go signal:

• Salability – Your profits history, current sales trend, location, and condition of your premises and equipment all contribute to the desirability of your business. Reviewing all these factors will help you know whether your business is saleable at a reasonable price.

• Readiness – If you are ready to move on and try the next level of your business career, you should ask yourself these questions first:

 Will the sale of my business give me enough money to start anew?
 Will I really be improving my financial and personal situation?
 Will I maintain a relationship with my business, as part-time employee or as a consultant?
 What will be my next step after this?
 Can I take further steps to make the business more attractive to potential buyers?
 Is this the best time to sell it?

• Timing – Choose the best time to sell your business. You have to consider other factors in selling your business, which includes changes in the neighborhood, the condition of your business, interest rates, and industry trends.

Selling a business requires good negotiating skills. There are important steps to consider when selling a business:

1. Determine a realistic price range – Determine a selling price that neither too high for potential buyers nor too low as a giveaway. A realistic price will satisfy your financial expectation.
2. Understand the tax consequences – Know at once how much tax will be taken off the sale of your business.
3. Look for a Good Sale
4. Seek potential buyers
5. Negotiate the sale – During negotiations, you have to specify the terms of the sale. Are you selling only assets or equipment, or the whole business establishment? These important questions must be settled during negotiations of a business sale.
6. Sign a sales agreement
7. Plan for the closing
8. File necessary paperwork with the IRS

In selling a business, it is essential that you know what your goals are, the steps you are going to take to achieve those goals, and make a good investment for the future using the proceeds of your sale.

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When Is the Right Time to Sell a Business?