At times entrepreneurs will have plans to sell their whole business, a division of the business, or a particular product or service. Sales will be profitable only if you are able to showcase the selling product or service in a larger way.
In order to prepare for a sale you should be aware of the factors that have to be taken into consideration to make the sales deal a big success. The result of a sale depends on the initiatives taken from your side. You should be able to communicate about the sales to a buyer in an amicable way. The communication should cover topics that can help the buyer in measuring the value of the profit that he can expect from the sales. There will be plus points and minus points. The seller should make sure that he covers both the topics while giving priority to plus points of the sales. There are entrepreneurs who will wait for a long time in search of a good buyer. It is not a good practice. Such type of behaviours can give a negative impression about the product or a service. Some buyers will think that the sale is not happening as the proposed product or service is not up to the mark.
Before selling a business make sure that you are maintaining all the financial documents including income statement, cash flow statements and balance sheet in a proper way. Most of the buyers will ask for documents that are audited and certified by a public accountant. Hire a quality system auditor and carry out the auditing work. A qualified auditor’s certification allows in improving the value of the asset. If more partners are there for a business then there is the need of capitalization table. In this table there should be consent of all partners for the sale. This helps the buyer in assuring that there are no complications in the deal.
Getting tax advice from professional accountants or tax lawyers helps in understanding the tax position. You have to pay tax for sales transactions. Consultation with an accountant will help in checking whether tax will have any direct impact on the sales deal. There are countries like UAE where you are able to enjoy many tax benefits. A qualified auditor will help you in understanding complicated tax structures and how it will affect the sales.
While running a business you could have taken patents, trademarks and copyrights for a particular product, service or brand. When you plan to sell your business make sure that you have secured the IP rights of business for future operations. Many time IP rights are infringed due to lack of knowledge in this matter. You should consult with an auditing firm or a professional consultancy in order to get a good insight into the activities that have to be carried out before announcing a business sales.
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