How to Assess the Condition of Your Business Before Selling It
Learn key areas to assess the condition of your business, which impacts pricing, exit timing, overall value, and its ability to attract buyers. To maximize your sale outcome, you may need to make strategic improvements to enhance its value. Answering these Yes or No questions will help you assess your business’s readiness for sale in the key areas that buyers evaluate. Excerpted from BizBuySell's Guide to Selling Your Business.
Transcript:
Assessing your business as a purchase prospect. Business condition affects pricing and exit timing expectations. To achieve your target price, you may need to extend your exit timing objective to allow for condition and value enhancements before offering your business for sale.
To offer your business as-is or only slightly enhanced condition you may need to reduce your price expectations before offering it for sale.
As a last resort, a business in high need of improvement and an owner with an urgent exit timing objective may decide to liquidate assets and close rather than attempt to sell the business.
Use the business condition assessment worksheet in the digital toolkit. Your answers to the worksheets yes or no questions will help you assess the sale readiness of your business in each of the 10 areas buyers examine. It will also help you prioritize improvement needs and estimate the time frame required to make improvements.
If you answer yes to all questions on the worksheet, your business is in sale-ready condition. If not, if you are like most owners and answer no to some or many questions, you have three exit options.
- Make the decision to liquidate assets and close rather than attempt to sell the business, the decision of owners with urgent need for an immediate exit and business conditions in high need of pre-sale Improvement.
- Make business and value enhancements before offering your business at the price you aim to achieve.
- Reduce your price expectations and offer the business in a- is or slightly improved condition.