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A business owner will need to prepare himself adequately when selling a business to ensure he or she can attract potential buyers and present them with accurate information about the business. It is a good idea to get all relevant accounting and sales documents together before selling a business to organize them in an easy-to-read package that can be shown to potential buyers. Make sure all information is current and accurate; inaccurate information can mislead potential buyers and even prevent them from going through with a sale.
Determine the fair market value of the business before attempting to sell. This may mean hiring an independent appraiser who can make a valuation determination for selling a business based on stock, assets, and other intangible considerations such as name recognition, location, and much more. Hiring a professional to do this step in the process is beneficial both for the business owner and the buyer, as the most accurate price will be determined so both sides are getting a fair deal. Businesses rarely sell for the highest valuation, since that may mean selling the business for the value that was only true for the period of time in which the business was at its peak.
The owner will need to be extremely careful when choosing a buyer. Selling a business is not often as easy as signing over paperwork and walking away; in some cases, the buyer may not have the funding to pay the full price all at once, which means it may be necessary to draw up payment terms. This is not always a bad decision when selling a business, but the owner will need to find out as much as possible about the buyer to ensure he or she is likely to receive payment when it is due. The buyer may also want to draw up a non-compete clause, which means the seller cannot open up a competing business or hire employees from the existing business for a new business.
It is a wise decision to research the best times for selling a business. Generally, it is a bad idea to sell during a downturn or during a slow market. It is better to sell when the market is hot, as the valuation of the business is likely to be higher and the owner will be more likely to attract serious buyers. Selling during a hot market also ensures the owner will get a better price for his business.