People are running their business in order to earn profit and want to let their business work sustainably, but they somehow cannot sustain their business because of some problems such as financial crisis, economic crisis, and more. There are seven steps that you need to take into account when you sell your companies before bankruptcy.
First, you need to figure out whether or not your business can be sold. In this point, you need to show buyers potentials of your business such as strong profitability’s history, opportunities for growth, skilled work force, loyal and large customers, desirable location, and competitive advantages including exclusive distributorship, contracts with clients in long-term and intellectual property rights.
Second, you also need to make sure that you are ready to sell your business both emotionally and financially since some businessmen feel regret in transferring their business to new owner and do not know what they will do after selling their business.
Turning to the third step, it is crucial for you to set the price of your business. You want to obtain maximum value of your business; however, too high price makes your business unattractive to buyers. To deal with setting price, you are recommended to use multiple of seller’s discretionary earnings (S.D.E) for valuing your business.
Fourth, you should properly prepare financial statements such as last three years’ profit-loss statements, last three years’ balance sheets, profit-and-loss statement of year to date, current balance sheet, and last three years’ full tax returns; you should take outdated inventory out, have equipment in good working order, and furnish other documentation.
Fifth, you should advertise your business online since many savvy buyers searching business sale via the Internet. You can advertise your business on two most well-known Web sites namely velkasaneeraus yritysfakta.
Sixth, you must choose potential buyers who are qualified to buy your business; otherwise, you will waste a lot of time. You should ask the buyers to provide some basic information including name with contact information, previous employment, educational background, previous business ownership, available funds for investing, sources of financing, and reason for buying the business.
Seventh, it is time for you to negotiate with qualified buyer about the deal. When you get a qualified buyer for your business sale and have initial meeting with selling memorandum, you should stop flow of sale information.