3 Things You Should Know Before Selling Your Business April 23, 2013 RICCentre By: Shanza Anwaar The hallmark of a successful entrepreneurial dream is most often a high-valued exit through the sale of the business to bigger players in the market. The Globe and Mail reports that 2013 will be a “year of slim growth for Canada.” Economists reveal that Canadians can expect a meager “1.5% growth in the Canadian economy, below the Bank of Canada’s current projection of 2%”. With these numbers in mind, entrepreneurs must be cautious when selling their businesses. Curtis Kroeker from BizBuySell.com and BizQuest.com, reveals businesses must consider the marketplace, profitability, and the value of the business before selling. Here are three things to help you figure out whether your business is ready to sell: SELLING YOUR BUSINESS WHEN THE TIME IS RIGHT One must think like an “entrepreneur, not a business owner” when it comes to determining the right time to sell your business. Hence, waiting till the business is in a slump is the opposite of what should be done. Debbie Allen, business consultant and strategist, suggests businesses should be sold when they show maximum profitability and when the market can provide the highest return for your business. DETERMINING DEAL BREAKERS Unsettled business matters such as “company ownership, accounting and intellectual property rights” should be resolved well in advance before selling your business. Consider an example of owners hiring contractors to write software for the business without transferring rights and thus, creating ambiguity in whose intellectual property the software really is. AVOIDING DEPENDENCY ON OWNER OR KEY CUSTOMER A strong, independent business can operate without relying on the business owner or a particular customer. A great “revenue diversification where no customer represents more than 5% of the business” is the key to attracting buyers and selling your business. Entrepreneurs must consider such key issues before placing their businesses on the market. To read the full post on “Questions You Need to Ask before Selling your Business”, click here. Shanza joins the RIC team as a Social Media Intern. Pursuing two undergraduate majors in anthropology and professional writing at the University of Toronto Mississauga, Shanza is also a co-editor and content writer at the Digital Enterprise Management Society. She hopes to make her mark as a Social Media Consultant. The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal and professional experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.