As a business broker I speak with lots of business owners who are planning the sale of their business. Here are some tips for those thinking of selling their business.

IS THERE A RIGHT TIME TO SELL MY BUSINESS? It is best to sell before everything has gone “pear shaped” – while

sales and margins are increasing, and there is still blue sky for the buyer. It is tempting to hold on in the hope the price will be higher later. But the people who sold before the last economic slowdown (between 2009 - 2010) may well prove to have been smarter than those who stayed on, as the business cycle now suddenly appears headed for a downturn. Generally it pays to plan ahead and prepare your business for sale.

WHAT SHOULD PEOPLE CONSIDER WHEN PREPARING THEIR BUSINESS FOR SALE?

The most important thing when preparing for a sale is to make yourself redundant. It is very hard to sell a business that is totally dependent on you working 60 hours a week. Who wants to pay good money for a life like that?

Next is the question of perceived risk for the buyer: the lower the risk, the higher the price. So the more you can do to instil confidence in the buyer, the better. You can do this with documentation – document your sales process, keep your financials updated, renegotiate your supply agreements with suppliers and customers, prepare operational procedures, etc.

HOW DO YOU FIND THE RIGHT BUYERS?A hairdressing salon has no value to a butcher. If you offered it

to him for free, he still wouldn’t want it. So you need to search for motivated buyers who think they can add value to the business. They will see less risk in it, and be prepared to pay more.

You can do this through “target marketing,” where you concentrate your marketing activity on searching for qualified buyers with a strategic interest in buying your business, rather than relying on luck, or paying a fortune to advertise to people who are never going to be buyers. It helps to hire a qualified business broker with a proven track record to do the job.

Jey Arul, MBA, CBI is the president of VR Business Brokers in Edmonton. VR in Edmonton has sold over 75 businesses in Edmonton since 2010.

For more information, visit www.vralta.com.

Tips on Selling a Business