While an entrepreneur might sell their business for several reasons, their ultimate goal is to get the maximum monetary benefit from the sale. The whole idea of a business sale is to get the business owner to pay off for the hard work they put into growing their business.
You can increase the selling price of your business and make big money from your sale. And this article will share some tips from ESL Advisors to sell your business for big money so read on.
Five Tips For Selling Your Business For The Best Price
How much money you get for your business often boils down to how well you negotiate with the potential buyer. With that said, there are other ways you can sell your business for the best price. And this article will explain five tips that can help you get big money for your business:
Tip 1 - Sell Your Business At The Right Time: Most entrepreneurs try to put their business up for sale when it isn't performing well. However, a poorly performing company will never fetch a high amount from its sale.
Our exit planning advisors will help you tweak your business to increase profitability. You can make the most profit possible by selling your business when it is profitable.
Tip 2 - Keep Your Company's Financial Records Organized: This is a no-brainer because prospective buyers will assess your company's worth based on its financials. So by working with a bookkeeping expert before your business sale, you can ensure your company's financial records are in check.
In addition to maintaining these records, you should also ensure that you make a loan or debt payment on time. A potential buyer will be willing to pay big money for a business with the least liabilities.
Tip 3 - Get In Touch With An Exit Planning Advisor: Seeking professional help from an exit planning expert such as our advisors can increase your chances of upselling your business. We have a pool of qualified buyers willing to pay big money for the right company.
We help you make your business more attractive to potential buyers by assisting with various operational aspects. More importantly, we help you during the acquisition negotiation phase, which can drastically drive up the expected price of your company.
Tip 4 - Consider Getting Earnouts For Your Business: While getting cash for your business upfront might seem like the most logical way of selling your business, it might give less value to your business. On the other hand, an earnout business sale requires the buyer to pay only a percentage of the business's value at the time of the deal.
Then the buyer has to pay the remaining amount over 1 or 2 years, which will be based on multiples of the profits the business generates during the period. If you are confident in your company's profit-generating abilities and are willing to work with the buyer after the sale, you can bring in more money from the business sale.
Tip 5 - Diversify Your Business: Most businesses rely on a single section, product, or service to generate revenue. Specializing is good, but it limits a company to a single source of income. While it may seem good as a short-term strategy, it might not be attractive to prospective buyers looking to make a long-term investment.
So by diversifying your business with multiple income streams, buyers would be willing to pay more for it as it reduces the risk associated with their purchase.
Getting the right help is crucial if you want your business sale to go as planned. At ESL Advisors, we have exit planning experts who work closely with your business to fetch the best value for your company.