Why do some businesses sell and some just close?

Operating a business for the benefit of the business owner – today….. is different than operating a business that is building value and will one day be sold for a nice profit.

Do you want to be able to sell your business when you no longer want to own it?

Here’s what you need to start doing NOW!!

  1. Keep your books accurately. A buyer will pay you a multiple of the earnings you can PROVE. You will not be paid for earnings that you can’t prove.
  2. Make sure your employees are paid in accordance with all federal and local laws.
  3. Get rid of any lawsuits that may be haunting you.
  4. Make certain your insurance policies are up to date.
  5. Make sure your business name is properly registered and protected with local agencies.
  6. Pull a Security interest report and get rid of any old UCC-1 filings (remember the copier you leased, then bought, 5 years ago? The UCC-1 was probably never released by the secured party (a UCC-3 form will release the lien).
  7. Limit the number of family members working in the business.
  8. Fully document, in writing, all important systems and processes in the business. This is difficult and time consuming but will help you get a much higher price when you sell the business.
  9. Get rid of unused assets – excess inventory, old equipment, etc.
  10. Most importantly – You may not know when you’ll need to sell the business so do the above NOW, so you can respond to any opportunities that might come your way.

The best advice…”Run your business like it’s always for sale, because it is.”

Dan

This entry was posted in businesses for sale, credit crisis and buying or selling a small business. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Post a comment or leave a trackback: Trackback URL.

2 Comments

  1. Posted July 23, 2008 at 4:45 pm | Permalink

    Great advice! I’ve been thinking about selling my business, so this is a good article to show me how to get ready. I was wondering though if you, or any other reader, would be able to direct me to a site where I can post my business? Any suggestions would be helpful. Thanks.

  2. Posted August 16, 2008 at 6:35 pm | Permalink

    There are a number of sites to post your biz for sale but first make sure you want to take on this job yourself. Like many things in life it often pays to hire professionals.

    I assume running your business is a full time job so you might want to think twice before you add a second job – Selling the Business!

    Although you may elect to attempt it yourself you should at least interview some business brokers to make certain. At the very least you’ll know how professionals approach the sale of your biz.

    Sites you can look at:
    bizbuysell.com
    bizquest.com
    sunbeltnetwork.com

    Good luck!

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