Selling your small business isn’t the end of the world. Many small businesses get sold every year, while many more replace them. About 600,000 new businesses open in the US every year and about 40% of the country’s workforce work in these businesses. Additionally, there are about 30 million small businesses in the US, and they comprise 99% of the country’s businesses. So if you think about it, your business is just a small drop into this boundless ocean. But it is unique in your way, and it can surely be sold for a hefty price.
Many small businesses, especially sole proprietorships, survive for about five years. Only a third of these small businesses survive up to ten years. This is because more problems arise the longer a company stays in business. Some of these problems can be too much to handle without significant help from a prominent investor. Getting a big investor into a small business can be detrimental to your personal goals for the company. In short, you can’t last long without gambling your business away. So what do most business owners do once they’ve reached this point? They may file for bankruptcy, liquidate their assets, or sell their business. In this article, we are here to talk about selling your business and what you need to do before you do so.
Calculate the Value of Your Business
You’ll have to know the value of your business before you go out auctioning it in public, and you’ll have to do this in advance. The simplest way of doing this is calculating your liquid and non-liquid assets.
Liquid assets can easily be converted to cash and are not directly influenced by the market. Cash-on-hand, money on your bank account, and accounts receivable are all liquid assets. They are simple to calculate, and you don’t need too much time to do this. The more complex ones are non-liquid assets.
Non-liquid assets are those integrated into your business. They do have their price tag, but they can’t be directly converted to cash. Non-liquid assets come in all forms, and one of them is software. For example, your business’ analytics recruitment platform is part of your non-liquid assets because you can’t convert that to cash directly. A cloud platform integrated into your company website is also considered a non-liquid asset. All of these are integrated into your business, and you can’t pull them out and sell them. Tools and vehicles are also considered to be non-liquid because they are affected by depreciation. Hence their value changes every year or so. If you’re having a hard time calculating this kind of asset, consider hiring an accountant.
Look at Your Business as If You’re the One Buying It
By the end of the day, you’ll have to see whether your business is worth buying. Remember that insoluble businesses aren’t attractive to buyers unless they see huge potential from it. So most likely than not, you’ll have to make your business soluble to sell it to the public. This is an example of looking at your business from a buyer’s perspective. There are more elements you’ll have to look into, such as the property itself. Some buyers might buy your business mainly because it is an attractive place in town. At the same time, some might buy it because they consider you to be a competition. All of these reasons are rational, and you’ll have to ensure that you look at your business from all perspectives.
Market Your Business
If you are already marketing your business, that’s great! If not, then you’ll have to start doing it right now. No one is going to buy a business that is unknown to the masses. Many entrepreneurs and business owners love businesses that are vocal and have an identity. In short, a business that everyone in town knows about. So you should start your marketing campaign right here and now.
Consider targeting a particular audience in your city or town and market your business to them. This can indirectly give potential buyers knowledge of your business. This is will also attract potential customers and clients into your business. This ripple will then lead to a snowball effect, and before you know it, a singular marketing campaign has made a difference in selling your business. Because of this, many buyers will find interest in your business and eventually offer a proposal.
Selling your business is as tough as managing it. But eventually, it’s the great reward that many business owners look forward to achieving. The ability to sell a small company after a couple of years making it grow is a fulfilling achievement that only a few Americans would know. So when the right time comes, follow these tips and sell your business the best way you can.