Buying a small business that's already got a thriving customer base is a great opportunity for someone who wants to own his or her own company but doesn't want the struggle of getting one off the ground.
Despite that, only about 30 percent of small businesses that go up for sale in California ever find a buyer -- possibly because many sellers don't really know how to go about the process.
There are four professionals, at least, that you need to involve in the sale of your business before it ever even hits the market:
1. Your accountant
Have your accountant pull together the last three years' worth of tax records for your business as well as monthly bank statements, profit and loss statements and all other records that pertain to the viability of the business.
2. A loan officer
Talk to a loan officer at your bank to ensure that a qualified buyer (one whose credit and financials are in order) can obtain financing to buy your business if he or she doesn't happen to have all the cash to buy you out just sitting around. Having your business prequalified for a loan means that your potential buyers know that they can get financing and where they can get it -- which can make a sale considerably easier.
3. An appraiser
You need to get your business appraised by an independent source. An independent appraisal can help you set a realistic price for your business and reassures buyers that they're getting a good value for their money.
4. Your attorney
Your attorney's participation before you even go to market is extremely important. He or she needs to help you draft the sale documents that will spell out exactly what the new buyer gets for his or her money. Does it include just the physical business and all the equipment? What about customer lists? Is there any intellectual property involved, like product ideas that are tabled for the time being?
In addition, your attorney needs to draft a confidentiality document for potential buyers to sign so that you can reveal confidential business information as part of negotiations without risk.
Selling your business can be a difficult, complicated process. For more information on how our firm can assist, please visit our web pages on selling a business.