Do It Yourself Business Sales Guidebook, Ben Brickweg, 2011, ISBN 9781456568764
The easy part is to decide when to sell your small business; the hard part is knowing how to do it. This book makes that process much easier to navigate.
First of all, why are you selling? If it is to get enough money to retire to Florida or Arizona (or the south of France), giving the business to your children is probably not a good idea. Get an accountant and tax attorney (if you have not already done so); you are going to need them. Obviously, keep it quiet. The last thing you want is for your employees, suppliers and/or customers to be running for the hills in panic. Get rid of all old or obsolete inventory, and give the facility a thorough cleaning.
There are several financial reports that you will need, but the two most important ones are a Balance Sheet and a Profit and Loss statement for the past several years. Make sure that they are absolutely accurate. It's tempting to fool with the "books" in order to make your business look more profitable than it really is. It's also a really bad idea; your deception will be exposed, sooner or later. Besides, showing a "down" year is not the worst thing in the world.
The book looks at things to consider when you are coming up with an asking price. You need to get on the Internet, and look up the asking price of comparable businesses that are up for sale. If your asking price is noticeably higher than the "average" price, reduce your price accordingly. You can count on a potential buyer doing the same search, and asking why they should pay more for your widget company than for a comparable widget company.
Put some time and effort into the marketing materials that will get potential buyers interested in your business. Get help if you need it. Find the right magazines and websites to place your advertisement. Keep track of everyone who shows interest. If they seem legitimate, send them a Confidential Business Plan, which gives some, but not all, details of your business, right after they sign a Non-Disclosure Agreement. If they object, they are not a legitimate buyer, and you can cross them off the list. Serious buyers know that an NDA is part of the procedure, and will have no problem in signing it.
This book covers the rest of the process, from negotiating terms of the deal (compromise is the important word), to due diligence (where you are obligated to reveal all of your business, good or bad), to ensuring a new transition to the new owners. It also comes with a number of checklists and worksheets, to make the process as painless as possible.
For anyone who is even contemplating selling their small business, this book is very highly recommended. It's easy to say that you will never sell your business; life has a way of making that decision for you. This is equally recommended for anyone thinking of buying a small business; it does a very good job of showing what the seller is thinking and seeking.
Paul Lappen is a freelance book reviewer whose blog, http://www.deadtreesreview.blogspot.com/, emphasizes small press and self-published books.