Selling a business: how does the process work? 5 tips

Selling a business may not always be a simple process. There are many factors that must be taken into account when offering a business. In many cases, there may be structural aspects that need to be evaluated or reconsidered in order to make the business more attractive to the market. 

Want to sell your business and don't know where to start? Zen Valuations can guide you through the whole process! It is always a good idea to hire a reliable consulting service. This way, you will be able to resolve any doubts in one session with an expert. You will also get detailed reports on the condition of your business. 

Before you set out aimlessly for selling a business, we suggest you review and follow these 5 tips. These will ensure that the presentation of your business to potential buyers is eye-catching, and they won't want to leave without making you an offer!

Of course, the process of selling a business does not happen overnight. The first thing you need to know is that you must be patient and take the decision calmly. This will allow you to raise the value of your company in time to ensure that you will turn a profit and not a loss. 

In any case, everything will also depend on the conditions you have for selling a business. The handling of the situation will be different if it is an orderly liquidation (i.e., no pressure to sell immediately) or if it is a forced liquidation (i.e., you are required to cease activities and sell the business urgently for some reason). 

1. Verify the financial statement

What is the first thing a buyer will look at when interested in a small business for sale or a large business for sale? The answer is simple: the financial status. 

Therefore, if you are thinking about selling a business, you must make sure that the accounts are in order and that there are no negative imbalances in the management of assets and liabilities. Make clear the company's capital, both in merchandise and investments, net worth and other types of resources and income. 

All this information must be well recorded in monthly, quarterly or annual reports, as the case may be. Be honest with the figures and with the current state of your company's accounting in relation to customers and also to suppliers. 

2. Analyze your product and service portfolio

It is essential to conduct thorough market research when you think about selling a business. This will define the relevance of the products and services offered by your business. In some cases, it is advisable to diversify the proposals to enter a better competition in the sector. 

On the other hand, it is also important to be clear about whether your company focuses on offering exportable products and services or only products and services that can be distributed locally or nationally. 

In the case of small companies or emerging businesses, the projections in this regard and the strategies proposed to achieve the objectives will be assessed. In many cases, this can be a decisive factor. 

3. Prepare the budget for the closing of the sale.

As you may know, there are certain costs involved when buying and selling a business. Primarily, these expenses cover the work of the lawyers in charge of carrying out the paperwork and preparing the relevant contracts for the transfers. 

But keep in mind that sometimes there are other transactions for which you will need to set aside money. For example, for the payment of sales commissions, for financial consulting or accounting services. 

4. Value your company professionally

Now, do you already know what is the established value for selling a business? This depends on many things and should be set after a professional valuation of the business. This evaluation guarantees that the price at which you are going to offer your business will be fair according to the market studies and the company's profile.

To carry out the process, experts have different methods and will know how to define which is the most appropriate for the case. Although, in fact, in most cases a comprehensive assessment includes all techniques. 

The 3 main techniques used are based on the analysis of the following factors:

• The specific market of the industry to which the business belongs

• Business assets

• Business benefits

5. Prepare a good Pitch Deck

How are you going to present your company at a business meeting? The most efficient way is through a Pitch Deck. That is, a brief but very clear document that explains the concept and conditions of your company.

Among other things, this includes the business model, growth opportunities and the most important financial indicators. If requested, you can provide a much more detailed and extensive document: a Pitchbook. 

If you are wondering how does selling a business in Canada work, or you are looking for a business for sale to acquire and boost your business career, do not hesitate to get in touch to receive the best advice and achieve your professional goals with the utmost confidence and security. 

One of the great advantages that Zen Valuations' clients have is that they can receive their assessments from anywhere in Canada virtually. 

Calls and financial study sessions or consultancies to start selling a business do not have to involve a greater investment of time and regional relocations.