Sell Your Business With TD Bank

Your business will be worth what someone's willing to pay for it – but it's crucial to get an idea of what that price is. Economic trends, the state of your industry's market and the price similar businesses have sold for all need to be considered.

Determine what your business is really worth:^*

• Tidy up loose ends
• Present your brand
• Increase your business's value
• Get the best advice available
• Find a competent advisor

Your business is worth what the highest bidder thinks it is worth, regardless of what you think. Increase the price for your business by showing:

Proven stability
Make sure you have a well-documented performance and growth record over the years.

Reliable future
Buyers will want to know that your main market(s) are growing or at least stable.

Look for research that shows your market is in an emerging or growth phase rather than declining. If growth has flattened, suggest areas of the market with untapped opportunities.

Stable customers
A well-managed customer database is one of the most valuable assets you can offer. Update your customer database and include retention rates and customer referral rates.

Secure cash flows
Buyers will want evidence of reliable revenue streams coming into the business. Start building more diversity into your customer base if you are too reliant on a few major customers.

Tight financial control
The buyer will want to know what key performance indicators (KPIs) you regularly monitor. Be able to share cash flow forecasts, profit forecasts and budget reports that show the business has been well managed and documented.

Protected intellectual property (IP)
The IP the business owns such as brand, patents, trade marks or trade secrets can be very valuable to a buyer.

Your exit strategy should consider all the different methods of exiting your business, and help you decide which is best. The most common components of an exit strategy are:

Deciding to sell
Selling outright is a clean exit if there is someone willing to buy. Some buyers prefer a schedule of payments linked to the performance you promised. In some situations, buyers come with conditions that can include an extended hand-over period during which they learn the business's day-to-day operations.

Be acquired
An acquisition is simply selling control of your business to a larger one, while retaining a role in the business. Seek an acquisition if you have a significant market share or strong product that larger companies might covet, and you are willing to work under new management.

Liquidate
Liquidating a business is an option when you cannot sell the business. The business is usually only worth the value of the assets or leases. Liquidate if the business is not likely to sell, or you own an asset of significant value, such as a highly sought-after location or equipment.

Leave to family
If you have family members willing to take over the business, it can be a viable option. You will want to have a succession plan ready.

Get organized early
Effective transition takes time, so start planning and preparing early. Identify trends in the industry and potential candidates who could replace you, and develop the core values you hope to see continue when you leave.

Groom your successor
Whomever you choose as your successor, you cannot assume they know how to run the business as well as you.

• Give your successor opportunities to watch how you work. The more they see you, the more they will learn.
• Start allowing them to make decisions and taking action, but give continual guidance.
• Take another step back and give them more chances to make decisions and take actions.
• Encourage and empower them so they truly believe they have ownership.

Assemble a changeover team
These might include lawyers, accountants, business brokers, trusted colleagues and members of your staff.

Overcome barriers
Identify and remove obstacles that may keep you from planning the eventual handover of your business. There will be distractions, there will be naysayers and there will be headaches. Your business legacy, however, is too important to allow these hurdles to stop your work.