Selling a business for sale is not easy, but the reward is maximized when done correctly. A successful sale starts with a marketing business for sale, and the optimal sale begins years before you try to sell the business.

1: Know the Business Value

The journey to sell the business begins long before you decide to actually try to sell the business. At this stage, you must know the business's value, which operational aspects, and which financial aspects you must improve.

You can contact a professional appraiser to estimate the value of a business, but this can cost thousands of dollars and take a long time.

The second alternative is to use one software for evaluating companies' value, such as Equitest.

Equitest is an AI business valuation software that enables anyone to evaluate any business without prior knowledge. It also uses by many professional business advisors, so it is a good fit for your needs.

You can start the valuation for free - here.

2: Enhance the Operating Aspects of The Business

The second step is to improve the operational characteristics of the business. The goal here is to increase sales as well as the profit margin of the company.

The higher the revenue of the business and the higher the profit, the higher the selling price will be. Therefore, it is necessary to start examining how they can be improved:

Marketing and sales: Are there any marketing channels that will increase sales? Are there new products that can be integrated into the business's product line? Are there products that cause losses and do not contribute much to the top or bottom line of the company?

Employees: Are there redundant employees in the business whose services can be dispensed without reducing sales or profits? Is it possible to replace employees with more skilled employees who can increase the company's value?

Physical facilities: Are the buildings in which the company operates too large or too small? Are the company's buildings old and in need of a renovation?

Digital assets: Is the company's website appropriately designed, and is the website stored in a suitable storage company? Are the social media channels - LinkedIn, Facebook, YouTube, etc. active? This will likely be one of the first things the potential business buyer will examine before deciding to negotiate the company's purchase.

Check the financial ratio sales turnover: Check the financial ratio sales turnover. This ratio is equal to fractional asset sales. If the ratio is equal to two, this means that for every 1 USD of assets, the company was able to sell 2 USD. This means that the higher the financial ratio, the higher the turnover, and the better the company operates.

3: Enhance the Financial Aspects of The Business

At the same time as examining the operational aspects of the business, there is an obligation to explore the financial aspects of the company.

You should focus on financial leverage and the division between short-term and long-term obligations.

Financial Leverage: Financial leverage equals the ratio between foreign capital and equity. Financial leverage that is too low can indicate that the company's value is far from optimal. Similarly, financial leverage that is too high can suggest that the company may go bankrupt due to the need to repay too many loans.

The division between short-term and long-term liabilities: in principle, short-term liabilities include liabilities that bear interest and liabilities for which interest is not paid. The obligation that carries interests can negatively affect the company or business bank account.

When you compare the interest rate paid on short-term and long-term loans, you find that the interest rate on long-term loans will be lower. Therefore, the company must consider converting short-term loans into long-term loans to save on the interest rate. This move is expected to increase the company's profit.

4: Re-evaluate the business:

After you have tested the firm's operational and financial efficiency and made the necessary changes, you must re-evaluate the business to find out if you succeeded in enhancing the firm.

If you believe that the value is still not optimal and you can increase it, repeat steps 2 and 3 regarding the firm's operational and financial efficiency. If you find the value acceptable and maximum, you can go to the next step.

5: How will you sell the business?

At this point, you must decide how to sell the company - whether to sell it yourself or through a business broker.

 Selling on your own can be done, for example, by registering the business on one of the websites designed for marketing businesses. You are also welcome to try contacting one of your competitors who may be interested in purchasing the company to increase their business. One of your suppliers may be interested in buying the business for the same reason, i.e., expanding the scope of their business activity.

Selling to a competitor and supplier also has financial feasibility. Selling to a competitor will allow him to increase the volume of purchases from his suppliers and, as a result, obtain better prices, improving his profit. Selling to the supplier will even help him grow the profit line because selling to the final customer will allow higher prices to be collected than selling to an intermediary. when a factory sells to a store that sells to the end customer, the factory and the store profit. When a factory owns a store, it can enjoy both the non-store profit and the factory profit.

Selling to a competitor or providing the truth also has an advantage: the company owner's acquaintance with the competitor. This can undoubtedly save over time. I will require the sale of the business. Another advantage is that they probably already know the business and cannot formulate a generally positive or negative position regarding the purchase of the agreement by the company owner.

If you choose to sell the business through a business broker, you should read what is said in the next step.

6: Find An Experienced Business Broker

If you are thinking of selling your business with the help of a business broker, find an experienced business broker. A business broker is a licensed professional helping people sell their businesses.

They can provide valuable advice and assistance throughout the process, which will help make the sale as smooth and successful as possible. In addition to helping you understand how to price your company, they will also assist with finding a suitable buyer for your business.

To find an experienced business broker to help you sell your company, it is essential to do some research first.

You should ask friends or family members if they know anyone who has used a broker in the past or if they have any recommendations for someone in particular. Also, look at reviews online and see what other people have said about them. This will give you an idea of whether they are good at their job.

7: Be Honest And Transparent

Whether you decide to sell the business on your own or through a business broker, it is essential to remember that the most important thing may be fairness and transparency. When marketing a business, honesty and transparency are two of the most important things to consider. When selling your company, you want to ensure that potential buyers know exactly what they're buying into.

Conclusion

In conclusion, in this article, we have compiled everything you need to know about marketing a business before selling it. We have seen that the long journey to marketing the company and its successful price begins with understanding the business's actual value. To know the value of the business, you are invited to try our excellent business valuation software Equitest for free. If you would like advice, you are invited to schedule a free meeting with us at this link.