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What should you keep in mind when selling your small business?

On Behalf of | Oct 17, 2022 | Business Law

If you own a small business in Washington state, you may someday realize that you want to sell that business. After years of the hard work that it took to become successful with your company, you want to make sure that the selling of your business goes smoothly. To avoid making mistakes when selling your company, consider these important facts.

Organize your financial records

Before you complete any business transactions, you want to make sure that your financial records are organized. Cleaning up your company’s financial records includes obtaining:

  • Tax records for the past three years
  • Financial statements for the past three years
  • Current calendar year financials

Fairly evaluate your company’s value

Before you sell your small business, you need to determine exactly how much the company is worth. Typically, business owners have difficulty doing this, and you may benefit from using a third-party evaluation service. These companies charge a flat fee to review your company and determine its value. They typically examine the following:

  • Sales
  • Receivables
  • Inventories
  • Outstanding debts

Remain motivated until after the sale

While you go through the process of selling your small business, you may experience the temptation of becoming apathetic. Some small business owners tend to stop caring as much when they trying to sell their business. This decreases your profit and makes your company look unprofessional.

Decide on an exit strategy

When you decide on your personal exit strategy, make sure you consider how the sale will affect your daily personal finances. A proper exit strategy will also help you realize the price you need to demand for your company in order to cover your bills.

Selling your business means selling your expertise

The process of selling your small business involves putting a price on your hard work and expertise. While you may feel overburdened initially, a successful sale will allow you to move on and experience new adventures.