When and how to create an exit strategy while selling your business
Ideally, you should have planned an exit strategy for your business before you started it. However, planning on how you would sell or get rid of the burden of your business on the day that you start the business might not be the best thing to do. That being said, if you are already established, it makes sense to formulate an exit strategy for when you eventually sell your business. With that in mind, here’s when and how to create an exit strategy for the sale of your business.
The look of it:
When it comes to selling a business, the first thing that a buyer notices is its appearance. The better the appearance, the better the first impression of the business. It is a possibility that you might have to invite a prospective buyer to the location of your business. In that case, you need to make sure that the location or the site of your business does not appear shabby or littered.
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Income and expenditure statistics:
Next up, we have the balance of the income and the expenditure of the company, which includes the profit, losses, salaries of the staff, incentives etc. This data should be kept updated at all times, irrespective of when you’re planning to sell your business or not. The balance sheet not only maintains a proper statement about the growth of the company but is also impressive when it comes time to sell the business. Using the balance sheet, the buyer will have in front of their eyes a clear picture of how the business has been performing and this will aid them in the decision making. An unclear picture of income and expenditures might be a major turnoff for any potential buyer.
The employees are the building blocks of any business. Irrespective of who the owner of a particular business is, a business cannot be run without the aid of the staff. One needs to have a skilled set of employees in order to have a sound and successful business. Thus, the staff is one criterion that any prospective buyer would definitely take into consideration while planning to buy an existing business. You must ensure that the employees that have been currently working in the business are well trained well enough to suit the circumstances in case of a shift in ownership. Make sure all their salaries and incentives are cleared before you start with the procedure of selling your business to avoid tension.
Tax files and inventories:
A clear tax filing report is a huge plus for selling a business. Do not forget to keep all the tax-related documents of your business ready at all times and especially when you are trying to sell it.
Any buyer would have to calculate the taxes depending on the area they are finding the business in. For instance, taxes of a business for sale in Nevada need to be anticipated before a buyer starts approaching sellers in that area.
Leases and renting contracts turn out to be a pain in the neck if not settled well in advance. You need to confirm with your landlord if you are running your business on a rented property if he will agree with a change in the ownership. All dues must be cleared in order to avoid any miscommunication and disputes in the future. Make sure that your lease is transferable so that when you sell your business the new owner can take over immediately without having to negotiate a new agreement.