When it comes time to sell your business, you want to ensure you’re getting the most for it. But how do you know what’s a fair price? What if you don’t have the time or resources to research the market?
That’s where our guide comes in. We’ll walk you through everything you need to know about preparing your exit strategy. Read further to learn more.
What Is an Exit Strategy?
An exit strategy is a plan for how you will sell your business, including identifying a buyer, negotiating a sale price, and handling the transfer of ownership. Exit strategies are essential because they help you get the most value out of your business.
While having an exit strategy may differ from one business to another, there are general steps that you can take to make the process less complicated.
Choose Your Method of Exiting
When selling a business, the first step of an exit strategy is to choose your exit method carefully. There are several methods of exiting, each with its advantages and disadvantages. Here are the most common forms of exit for businesses in New Jersey:
- Selling to a third party
- Passing the business down to family
- Selling to employees
- Closing the business
Perform a Pre-Sale Clean-Up
Once you’ve chosen your method of exiting, it’s crucial to perform a pre-sale clean-up, including taking care of getting your books in order, legal, and financial.
- Get Your Books In Order: Once you’ve chosen your exit strategy, it’s crucial to get your books in order which includes taking care of and having up to date records in regards to your legal and financial documents.
- Legal: These can include leases, contracts, licenses, permits, and business formation documents.
- Financial: This can involve preparing financial statements, tax returns, and profit & loss reports.
Determine the Value of Your Business
The next step is to perform a business valuation, so you can come up with a reasonable asking price. A business valuation estimates your business’s worth based on financial history, market conditions, and growth potential.
There are several business valuation methods, but the market approach is the most common. This method looks at comparable business sales to determine the value of your business.
Decide Where and How You’ll Sell Your Business
The last step is determining where and how you want to sell your business. You can either do it yourself or hire a business broker. If you decide to do it yourself, you must consider the most effective way to market your business.
If you decide to hire a business broker NJ, they will handle the marketing and sale of your business. This includes finding buyers, negotiating the sale price, and managing the due diligence process.
Sell Your Business With Midway Business Brokerage
If you’re looking to sell your business, Midway Business Brokerage can help. We’re a reliable New Jersey business broker specializing in selling businesses. We’ll help you through every step of the process, from valuing your business to negotiating the sale price.
Contact us today to learn more about our services.
