San Francisco Bay Area :: Business Sales, Valuations, and Advisory Services for Privately Held Companies

I want to sell my business. Where do I start?

According to Wikipedia, the San Francisco Bay Area has the highest median household and per capita income of any metropolitan area in the United States. And business is going just as well!

But there comes a time when every business owner will want to retire. Selling your business can take 4-12 months from start to finish, plus any consulting or training; keep that in mind when developing your exit strategy.  Once you have decided that now is the right time to sell, you want to engage the very best professional guidance available. 

The first step when planning the sale of your business is to understand what your company is worth.  Most business owners are so focused on day-to-day operations that they rarely take the time to develop an exit strategy.  Developing a solid exit strategy will make a huge difference in whether or not your business is saleable and how much it is worth. Here are a few tips to help ensure that your business is ready to sell when you are:

·         Get an appraisal.  The first thing you should do is obtain a realistic idea of what your business is worth.  Use a certified business appraiser or a business broker.  Business brokers are the professionals who will facilitate the successful sale of your business.

·         Get your books in order. Be sure you are driving all income to the bottom line.  Buyers want to see at least 3 years of complete and accurate Profit & Loss Statements and Balance Sheets. Make sure your Tax Returns match your P&L's.  Have your books reviewed by a CPA. 

·         Identify the true profitability of your business. It's important to understand how much cash your business is truly generating.  Most, if not all, small businesses have a fair amount of non-business related expenses or expenses that are widely considered discretionary.  A Buyer will view all these when projecting what his/her cash flow will look like after an acquisition. 

·         Develop Key Employees . Delegate responsibility to key employees and involve your key staff members in the decision making process.  Demonstrating that your company’s success is reliant on your capable, well-trained employees – not just you – will pay off at the time of sale.

·         Document what you do. Documented records and plans give a buyer greater comfort that he or she will be able to emulate your successful growth and will help your buyer obtain financing.  Also, be sure to keep business records clean and well-organized.

·         Diversified Customer Base. Expand your customer base to minimize that particular customer’s share of your revenue.

·         Inventory. Inventory is a critical component of a lot of businesses. Your inventory needs to be both current and salable.

·         Review Your Assets. Sell off or dispose of unproductive assets or unsalable inventory. 

·         Identify Value Drivers. What is it that makes your business unique?

·         Remodel, Clean, & Organize. A well-maintained facility will get the best price. 

There are dozens of Business Brokers in San Francisco Bay Area that can help you make the most of the sale. Their professional staff specializes in helping you sell your business.

It is a fact that every business owner will exit his or her business at some point.  By acknowledging this fact as early as possible and making the necessary preparations, the better chance you have of selling your business for the best price and terms. 

About the Author:Russ Cowley, CBI is a Certified Business Intermediary with ABI Business Sales in San Ramon, CA.  Mr. Cowley specializes in helping Northern California business owners sell their business.  Licensed in California and with more than 35 years experience in business brokerage, mergers & acquisitions, valuation and financing, ABI’s value added services bring the highest levels of personal service, professionalism and confidentiality.  ABI’s unique selling process is centered on achieving the maximum value from the sale of a  business.