Read This If You Are Ready To Sell Your Business In Nashville
If you are ready to sell your business, and your business is in Nashville, you are in luck. Music City is a hot market, and there is a virtually endless line of buyers ready to invest in Davidson and surrounding counties. But before you stick a “for sale” sign in the window, there are a few things to consider.
Why do you want to sell?
Obviously, you want to know what your business is worth, and money is likely a driving factor in your decision to sell your business. But it should not be the only motivator. The real question is, “Do I really want to sell?” If you are truly ready to hand the reins over to someone else, you will take the time to understand the market. You will sidestep your personal feelings toward the company that you built with your own two hands to get a clear idea of what it is actually worth. Once you have this mindset, you are ready to take the first steps.
Your financial records are the first thing you need to put your hands on before you sell your business. Nashville investors are interested in your bottom line, and that means numbers. All of them. Hopefully, you – or your accountant – are completely organized and can easily access your sales figures, profit and loss statements, tax returns, and accounts receivable. Remember, it is these numbers that determine how much you can expect to walk away with when you say sayonara.
A side note here: If you have not reviewed this information in the last few months, now is a great time to get yourself up to speed on your business’s financial standing.
Know your buyers
There are many buyers who want you to sell your Nashville business just as much as you do. But, no two buyers are alike. A huge chunk of business-owner-hopefuls plan to do so after a layoff or unwanted transfer. Some look to entrepreneurship after retirement or because they are unsatisfied with their current career. It is important to know who is looking so that you can best identify a willing buyer.
A willing buyer is one that not only has the desire and need to buy a business but also has the financial resources to do so. Most importantly, like you, they will have a reasonable expectation as to what they can expect to get out of it. This is, in part, why having your financial ducks in a row is so crucial to the selling process.
Whether you have decided to sell your business or not, people looking to buy in Nashville will want to know a few things before they consider your organization. Questions you should be ready to answer include:
- What is your worst profit year?
- Are there opportunities for further growth?
- How is this business unique, and will it stand out in Nashville’s ultra-competitive markets?
- Is current inventory included in the sale?
- How much money does the business currently owe? Will this be settled beforehand?
- Has the company consistently realized an annual increase in sales and/or profits?
- How much is it going to cost?
This final question includes the cost of acquisition for the business itself, salaries of all current employees, rent, if applicable, and any other ongoing expenses associated with running the business. Remember, ultimately, what you are selling is cash flow. If you can not provide financial statistics and answer the hard questions, it is going to be much more difficult to sell your business. Nashville’s investors will not wait around for you to get this information, it has to be ready when they are.
The small things matter
Looking good on paper is only part of the puzzle. If you want to get the most out of your business, you also have to make a good physical impression. Just like selling a home, your best bet is to spruce the place up before buyers come to call. A few small improvements, such as a new copier or redecorated front desk, can make a big difference. While these may not directly affect the price, they will steer your buyer’s first impression. If you are looking to sell your business to an out-of-town buyer, add a bit of Nashville flair, such as skyline art or record displays. This will enhance the overall feel of your brick and mortar location.
Another small thing you can do – and one that will not cost you a dime – is to create an operations manual. This will leave your buyers feeling as though your business is organized and assure them that it will run as smooth as silk after the acquisition.
For help selling your business, contact Beacon Exit Advisors today at 615.813.0461.