Quick Answer: How Can I Sell My Business Fast?

What documents are needed to sell a business?

DocumentsNon-Disclosure Confidentiality Agreement.

Personal Financial Statement Form for Buyer to Complete.

Financial Ratios and Trends.

Client List and Major Client Contracts.

Corporate or Schedule C Tax Returns for Past 2-3 Years.

Copies Proving Ownership of Patents, Trademarks and Other Intellectual Property..

Who pays closing costs when selling a business?

Sellers are not typically expected to pay the closing costs on a deal (that honor is usually reserved for the buyer), but that doesn’t mean they never will. For one reason or another, it may actually benefit the seller to offer to pay the closing costs.

How do you avoid paying taxes when selling a business?

One of the most common ways to reduce the tax liability of a business sale is to receive payment over time. By deferring the receipt of proceeds over multiple years, you can control your tax rate by managing the portion of the sale price that falls into higher tax brackets.

Can you sell a business that is losing money?

Selling the Business When times are tough and a business begins losing money, arranging even a bargain-basement sale is usually impossible. But as with anything, there are exceptions. A business with a great reputation, market position, or excellent location might be salable even when profits have disappeared.

How much can my business sell for?

There is plenty of room for judgment, but by and large, a profitable, reasonably healthy, small business will sell in the 2.0 to 6.0 times EBIT range, with most of those in the 2.5 to 4.5 range. So, if annual cash flow is $200,000, the selling price will likely be between $500,000 and $900,000.

What are the tax consequences of selling a business?

If your business is a sole proprietorship, a sale is treated as if you sold each asset separately. Most of the assets trigger capital gains, which are taxed at favorable tax rates. But the sale of some assets, such as inventory, produce ordinary income.

Can I sell my share of a business?

You also need to get consent from any other shareholders in your company. If you’re the only shareholder, you can resign as director and sell your shares – effectively buying yourself out of the business. … This is why most business owners start thinking about selling a few years in advance.

Where is the best place to sell a business?

8 Places to Find Businesses for Sale OnlineBizBuySell.com. … BizQuest.com. … BusinessBroker.net. … BusinessesForSale.com. … BusinessMart.com. … DealStream.com (formerly MergerNetwork) … Franchise Gator. … LoopNet.com.

Why would someone sell a profitable business?

Selling a profitable business or website so they can roll the money into their next venture is much more appealing than taking out a bank loan and going into debt or giving up a substantial percentage of their idea for start-up capital. Starting debt free and retaining 100% ownership is the ideal situation.

How can I sell my small business fast?

Use these tips to learn how to sell your business quickly at the highest price.Review of Accounting Records. … Business Operations Documented. … Have a Marketing Plan. … Hire a Business Broker. … Plan to Target Buyer Prospects. … Plan for Due Diligence. … Collaborate for Successful Transition.

What happens to business debt when selling?

If you’re personally liable for business debts, selling the business does not eliminate your liability. The buyer might agree to pay some or all of the business’s debts but you’re still on the hook unless the creditor agrees to release you. As a result, the creditor can still come after you if the buyer fails to pay.

What tax do you pay when selling a company?

Capital Gains Tax You may have made a ‘capital gain’ when selling the company (for example the money you get from the sale, or assets from it that you keep). If this means you need to pay Capital Gains Tax, you may be able to reduce the amount by claiming Entrepreneurs’ Relief.

What is the best way to sell your business?

How to sell your businessMake sure selling is the right decision.Decide whether to use professionals.Decide what’s for sale.Value your business.Find buyers for your business.Negotiate the sale.Prepare the contract.Take care of your employees.More items…•

Do I pay tax on selling my business?

If you are selling a business, the most important consideration (as far as tax is concerned) will normally be whether or not you will qualify for Entrepreneurs’ Relief – this means that you only pay 10% Capital Gains Tax on any qualifying gains.

What is the formula for valuing a company?

Multiply the Revenue As with cash flow, revenue gives you a measure of how much money the business will bring in. The times revenue method uses that for the valuation of the company. Take current annual revenues, multiply them by a figure such as 0.5 or 1.3, and you have the company’s value.

How do you value a small business that loses money?

Another way to value an unprofitable business is to look at the balance sheet; again, you might pay a discount to book value because of the lack of profitability. You might estimate liquidation value, which includes the time, energy, and cost to liquidate, and you could value the business at that number.

How do you sell a struggling business?

Can You Sell a Failing Business: 7 Top Advice to do it CorrectlyPoint out the value in the business’ asset. … Identify the problem and solve it. … Be honest and patient with the buyer. … Show that the business was once profitable. … Clear all outstanding debts and legal issues. … Get a broker to handle the deal.More items…•

How do I figure out how much to sell my business for?

Determining Your Business’s Market ValueTally the value of assets. Add up the value of everything the business owns, including all equipment and inventory. … Base it on revenue. How much does the business generate in annual sales? … Use earnings multiples. … Do a discounted cash-flow analysis. … Go beyond financial formulas.

How long does it take for a business to sell?

The short answer is “it depends.” The average transaction that we are taking to market right now takes, on average, seven months to complete. This time to completion has tended to lengthen over the past few years.

How do I prepare to sell my small business?

If you’re considering selling your small business, consider these seven steps to stay on the offensive.Determine the value of your company. … Clean up your small business financials. … Prepare your exit strategy in advance. … Boost your sales. … Find a business broker. … Pre-qualify your buyers. … Get business contracts in order.

What is the rule of thumb for valuing a business?

The most commonly used rule of thumb is simply a percentage of the annual sales, or better yet, the last 12 months of sales/revenues. … Another rule of thumb used in the Guide is a multiple of earnings. In small businesses, the multiple is used against what is termed Seller’s Discretionary Earnings (SDE).