You’ve decided to move onto something bigger and better – it’s time to sell your baby.
By Craig Falck for Africa Report
Photograph: © Dmitriy Shironosov | Dreamstime.com
Before we start, there’s one thing that you need to do: ask yourself again, “Do I really want to sell something I’ve worked so hard for?” If you have a single doubt, you’re probably doing the wrong thing. If, however, your gut instinct is certain that this is what you want to do, it’s time to go ahead and put up that “For Sale” sign.
The first thing you will need to do when you’ve decided to let go of your business is make sure that you have been honest with the taxman, the banks and everyone else where money is concerned. Your accountant will have to draw up the most recent financial documents that you will provide potential buyers with. If you have been involved in dirty business or any other illegal practises, you might want to consider correcting these as soon as possible as there are legal ramifications of selling a business (and anything else, for that matter) based on falsified or incorrect information. Your accountant will also list your assets and any other financial information; you will use these when you calculate a market-related valuation of your business – aka your asking price.
Each business form will have certain rules and regulations when it comes to selling procedures. In a close corporation, for example, the member wanting to sell is compelled to offer his or her membership to the other members. If they do not buy the member out, the leaving member may then approach outside parties. It varies for each business, so it’s important to know where you stand with regards to this. If the other people in your business want to buy your share, problem solved. If you’re the only owner, it’s also a lot easier as you have no responsibilities to anyone else.
If you have a good name and reputation and your business is successful, you’ll probably find that someone else in the industry will want to acquire your business and merge it with theirs to give them greater market share. All that’s left to do is discuss personal terms and sign on the dotted line. If you have a bad reputation or your business is in ruins, you’ll find it easier to squeeze blood from a stone than find someone to buy your business, even if you sell it for such a low price that you’re pretty much giving it away.
Selling your business can be extremely easy or it could be difficult. The important thing to remember is that there are rules, regulations and guidelines that you need to follow. If you don’t, you could find yourself in hot water with the authorities.
