3 Steps for Selling Your Business

By Andy Kocemba

Maybe you founded your business 30 years ago and it’s time to retire. Maybe you bought your business five years ago, have grown it and are ready for something new.

Maybe there are health or family issues pushing you to sell your business.

Whatever the reason, if you feel 2018 is the year to sell your company, here are three steps to get you moving in the right direction.

1) Get introspective

Above all, you need to take a step back and figure out if this is truly the time to sell. In my experience, I’ve found that personal factors far outweigh financial or business factors in motivating the sale of a company.

Take a weekend, or even just an afternoon, find some quiet time and ask yourself the challenging questions. Why do I want to sell? What will I do with my life without my business? How will I support myself financially?

A successful sale and transition out of business ownership depends on a clear understanding both what you are leaving (your business, both the good and the bad) and what you are gaining (retirement, hobbies, service work, etc.). These motivating factors can be far more important than the price or terms in leading to a business sale.

2) Clean up shop

Once you’ve decided that selling is the right move for you, it’s time to get your business in order. Much of what you’ve done day-to-day in your business to make it successful will help in this step, but the ways you’ve operated your company might not always bring the best value or lead to a quick sale. If that’s the case, you’ll need to do a little cleanup.

First, organize your financials. Make sure that your profits are stated and that the expense categories you use would make as much sense to a company outsider as they do to you. You know how your company earns you money, and you want to make sure it is obvious to potential buyers as well. 

Next, focus on your processes. Make sure you document the way you do business as much as possible. You want potential buyers to be confident they can take your business and run it as well as you have through the years. They need to be sure that when you walk out the door for the last time, you aren’t taking any information stored in your brain that hasn’t been communicated to them. 

Finally, spend some time on the physical aspects of your business. Just like you would to impress a customer, spruce up the “curb appeal” of your business to impress buyers. Clean facilities, nice vehicles, and laundered uniforms will all add to the notion that your business is a well-run machine.

The main takeaway is to build buyer confidence and trust.

3) Contact a business broker

Your business broker is the person who will package your company and bring it to the marketplace. They will put together the materials necessary to present it to potential buyers, screen and qualify buyers to protect both your confidentiality and your time, and, ultimately, find you the best buyer and guide your transaction to a successful close.  

Working with a broker is where the rubber meets the road. This is where all the work you’ve done to prepare both your emotions and your business for sale get put into action.

If you are serious about selling in 2018, a good business broker will keep you on track when you have doubts, will guide you through once-in-a-lifetime situations, and will help you maximize value and minimize time on the market.  

Andy Kocemba is president and co-owner of Calhoun Cos., a top business brokerage firm in the Upper Midwest. Calhoun Cos. has been connecting buyers and sellers since 1908, working with small- to medium-sized businesses across all industries. A graduate from Bethel University, Kocemba joined Calhoun Cos. in 2003 as a sales agent before buying the business in 2011. He is a member of the International Business Brokers Association, Minnesota Chamber of Commerce, and Better Business Bureau.