Tips for entrepreneurs in Oregon trying to sell their business
Before selling their business, there are several steps entrepreneurs should take to ensure a smooth, successful sale.
After putting in many hours of hard work, many business owners in Oregon decide it is time to sell their company, either because it is struggling financially or because they are ready to move on to another venture. Business owners who want to ensure the sale of their company goes smoothly should consider the following tips while preparing their venture for sale.
Value the company
Before moving forward with the sale of their business, entrepreneurs should have a third party value their company to provide a realistic estimate of its worth. Most professional reviews cover the business’ sales, assets, inventories and receivables in addition to any existing liens or outstanding debt. The purpose of a professional valuation is to identify opportunities available to the company and any threats that could compromise its performance.
Highlight profits, not revenue
Many business owners mistakenly believe that revenue figures are more important than profits during the sale of their company. While revenue figures can make a company’s operations initially sound attractive, what really matters is the profit a business produces. While business owners should readily provide revenue figures while working with a potential buyer, they should make sure to highlight their profits.
Provide verifiable financial documents
Entrepreneurs should be prepared to provide verifiable proof for every financial claim they make. For example, if a company sells advertising space, they should possess bank statements and invoices that match up with deposits that they can provide to a potential buyer for review.
Look forward to the future
While a business may have been highly successful for years, its previous success is not relevant at the time of the sale. This is especially true if the company has been struggling financially. Generally speaking, buyers are interested in the performance of the business over the last 12-month period as well as its future viability and sustainability.
Entrepreneurs should remember that correct information will always surface, so they should be careful to be upfront about everything from the beginning to the end of the sale. Most experienced investors understand every operation will have positive and negative aspects since no perfect operation exists.
Although these tips may help business owners in Oregon ensure the successful sale of their business, they may still struggle with the legal aspect of the sale. Those who are getting ready to sell their business to an investor should reach out to an attorney in their area for help with this part of the process.