Want to Sell Your Business in 2022? Ten Things You Need to Do Now

As we move through the fourth quarter, you may be contemplating what your next steps are for your business. Maybe you're tired, over the COVID pandemic, and ready to move on. Perhaps your business is peaking and you think it’s a good time to sell. Retirement might be beckoning. No matter why you want to sell your business in 2022, the right M&A firm can help you get prepared. Here are 10 things you need to do now to ensure you're well positioned for a sale.

1. Know how much your business is worth. This can be scary, especially if you’re hoping for a high valuation. A professional valuation ensures your dreams are well rooted in reality. The right valuation expert can also help with identifying areas of improvement and key value drivers, so you can start growing value now.
2. Get the books in order now. The buyer will want to see at least three years of financial documents. Make sure these documents are in order, and accurately support your claims about value.
3. Understand your business’s true profitability. It’s common for small business owners to claim numerous nonoperational expenses. You should be able to support these expenses. Work on reducing all nonoperational expenses to drive value and ensure clean books.
4. Get a financial advisor. The right advisor can help you plan your own financial future, assess your business’s role in that future, and offer realistic advice about how much you should sell your business for.
5. Work on curb appeal. Buyers who visit your company for the first time should see a well-run company, with a building that is attractive, offices that are clean, and operations that are efficient and evidence-based.
6. Consider management issues. Who will run your business when you leave? If you’re too involved in daily operations, then value can tank after your departure. Make sure you have an exceptional management team who is equipped to oversee the company in your absence. Now is the time for you to begin pulling back.
7. Know why you are selling. Buyers will ask why you are leaving because they want to ensure there’s not a hidden crisis or significant risk. After all, if your business is so great, why would you leave it? Be prepared with an honest, coherent explanation.
8. Get your paperwork in order. You need all of your legal paperwork ready to go. That includes licenses, permits, contracts, and more. Consider getting an attorney to review these documents for any potential issues—such as a non-transferable lease.
9. Work with exceptional advisors. Begin interviewing your advisory team now. A sale is not a DIY undertaking, and the right M&A advisor can help generate real sale value. Hire an attorney and an accountant who are highly skilled at M&A. In most cases, your in-house providers will simply not have the skills necessary to support the transaction, so you may have to look outside of the business.
10. Remain focused on what matters. A sale can be exhausting, but you cannot let your company fall into disrepair because you’re distracted. Now is the time for a strong finish. Keep your company profitable and you'll have no trouble selling it.