The life of a small business entrepreneur is one filled with challenges, triumphs, and even a few disappointments. It’s a full-time occupation that features the kind of professional demands that most people would never choose to face. That’s why it takes a special type of dedication to succeed as a small business owner, and the rewards are often commensurate with the amount of sweat equity put into the business by the owner.
What happens though, when a small business owner reaches retirement age? After pouring so much effort into their enterprise, it is often difficult for them to face the inevitability of charting a path for their business without their involvement. If they have no existing partners, it’s likely they’ll have to sell the business to a new owner. That can mean entrusting the turnover of the business they worked so hard to sustain over to a broker or sales agent. It isn’t something that sits well with owners with a do-it-yourself spirit.
An Appealing Path
For small business owners facing the prospect of selling their companies, there are a host of new options that allow them to take personal control over the process. They no longer have to rely on business brokerages, who often lack industry-specific knowledge and may not deliver leads in a timely fashion. They need only apply the same type of initiative and drive that made their business a valuable asset in the first place. That, and a little modern technology via the internet. Here’s how it’s done.
Setting a Price
The first step in selling a business is to determine an asking price. This is a task that requires some outside assistance. Owners have a tendency to overvalue their assets, so a neutral evaluation is preferable. In practice, this means finding and engaging the services of an appraiser. True to the entrepreneurial spirit, though, there’s are ways that owners can determine a rough value of their business themselves. To do it, they have to determine the most desirable valuation method and apply their knowledge of the business to work out its value.
The next task that needs to be addressed is to go over the businesses finances to make sure that they present an accurate picture of the business as it will exist for the new owner. This means that all discretionary spending should be eliminated, to create a realistic reflection of operating expenses. The important rule of thumb to use is that nothing should be left on the balance sheet other than what the new owner must continue doing to operate the business. This will give them an idea of the amount of flexibility the business has, and present a more attractive view of the overall health of the company.
Finding A Buyer
Here’s where the value of modern technology really shines through. Rather than trying to advertise the business for sale through traditional channels, small business owners can no turn to purpose-built online marketplaces to sell their companies. This is the most effective way to advertise a business for sale. Listing the business in this manner will expose it to a willing set of buyers, who are already prepared to make a purchase. These portals also provide assistance with things like preparing legal documents for a business sale and assisting with market research to maximize the eventual selling price. In short, they give owners the tools they need that used to require a broker (and their high commission percentage).
Planning an Exit Strategy
Most small business owners are key to the operation of their companies. That being said, it’s very common that they will be called upon to assist with the transition to new ownership. This means that the original owner will continue to work at their former business for some time, making sure that all critical functions are continued while the new ownership delegates responsibility for them. These needs dovetail nicely with the feelings of most small business owners. A full 53% of them say that they don’t want to retire, even when they have the opportunity to do so. It’s proof that the habits of self-starters die hard.
A Legacy to Remember
If all goes well, the business will continue successfully long after the sale. Of course, the hard work that went into it from the beginning plays a large role in that. Fortunately, these DIY strategies provide entrepreneurs with the means to find the right buyer to continue to protect and grow their life’s work. For most, it is yet another fulfilling challenge in a career filled with them. That is, after all, the goal that most have set for themselves when starting on their business journey, to begin with.