2017 presents another opportunity for business owners to consider selling their business. An effective exit strategy should be in place now to ensure a smooth transition between seller and buyer. An effective exit strategy typically increases profit and decreases the time on the market, both important factors when selling a business.
Selling a business can begin with these simple, effective tips.
Tip One: Do your taxes early.
Doing your taxes early means that you should make an appointment with your accountant as soon as possible. The sooner your business’ taxes are complete, the better, as this offers you the advantage over other businesses that may be coming on the market in 2017. Prospective buyers are able to have a clear view of your financial records for 2016, an important part of selling your business.
Tip Two:Clean your books before doing taxes.
Business owners wanting to sell in 2017 should only expense verifiable expenses that are easily added back to your cash flow calculation. This prevents a decrease in the value of your business, something potential buyers do not wish to see when searching for the ideal business to buy.
Business owners sometimes try to deduct personal items that are difficult to add back to their cash flow calculations, such as excess personal mileage and excess meals. These numbers may not show a business in the most positive light, something important to owners wanting to sell their business.
Tip Three: File your taxes sooner than later.
Filing your taxes sooner allows prospective buyers the ability to evaluate the business’ profits in a simple manner. Clear financial records show that you are prepared to sell your business and are providing potential buyers with this information allows them to view the business’ cash flow, a vital part of any business.