3 Questions to Ask Before Selling a Business
There are many possible reasons why a business owner would want to sell his/her business. Consulting with a skilled Florida business transaction attorney is essential for a business sale to go as smoothly as possible. However, before a business sale can happen, owners must consider multiple factors. Below are three different questions owners should ask before deciding to put their businesses up for sale.
Is the Business Attractive to Buyers?
Owners must consider the salability of the business they intend to sell. If the answer to the question above is no, the sale of the business should be delayed until its marketability is increased. A business’s desirability is affected by many things. Buyers will look over the business’s profit history, the location, current sales trends, the quality of the business’s property, and the condition of its equipment to determine whether to make a purchase or not. Owners should honestly evaluate these conditions and see which areas need improvement. Other ways owners could increase a business’s appeal is by lowering their own salaries and cutting perks they benefit from. By increasing a business’s salability, owners will be able to sell their business quicker and for a better price.
Is the Owner Ready to Sell?
An owner’s readiness to sell is affected by many personal and professional factors. Owners should have an understanding of the benefits of selling their business to determine whether or not they will be able to enjoy those benefits. Here are some questions they should ask themselves to gauge their readiness.
- Will my business be sold at a reasonable price that justifies the work I put into it?
- Will the business sale improve my financial or personal situation?
- What are my future plans?
- Will I maintain a relationship with the business or start anew?
- Is this the best time to sell?
When is The Best Time to Sell?
After asking themselves the above questions and getting satisfactory answers, owners have to figure out the optimal time to put their business on the market. The timing of a sale takes into account business cycles, which are determined by ups and downs of economic activity. The preferred outcome would be to sell during a period of high market demand. However, circumstances such as national recessions or local economic downturns can prevent favorable market demand. Owners have to consider whether delaying the sale would be the best option. They can also analyze other factors such as changes in the neighborhood where the business is located, interest rates, and industry trends to determine whether going through with the sale despite unfavorable market conditions will still be beneficial.
Selling a business is a difficult decision to make. Many owners have spent significant amounts of time, money, and labor to start and run their businesses. So, they have to consider professional as well as personal factors before putting their companies up for sale. When the owner finally decides to sell, the next step should be to consult with a Florida business transaction attorney. Call us to find out how our team of experienced business attorneys will guide you through all the steps of the business-selling process.