Selling Your Business
For business owners who have been looking for the right time to sell their business, now may be the right moment. With most economic signs pointing to an end to the “Great Recession” combined with significantly lower oil prices, a booming stock market and rising consumer confidence, many are feeling that this is the right time to put their business up for sale.
However, selling your business will consist more of just putting up a sign and hoping that a flood of buyers walk in the door. You’ll need to take some steps to ensure that the right investor comes through your door so you can make the best sale possible.
Get a Broker
There are a number of reasons why a broker can help you with selling your business. Brokers can assist with determining the value of your business, provide tips on how to improve its profile in the area and create a complete package of details that will help seal the deal once the right buyer shows up.
However, the most important aspect is that the right broker has a network of contacts that will help find the buyers for your business. This means that the number of people who know your business is up for sale will expand greatly which increases the chances of finding the best buyer for your company. When you consider the entire package of advantages that brokers offer, it can really help in preparing your business to go on the market. This will include advice on what areas of your business to shore up as well.
Keep in mind that a broker will take a commission for their work so add that into your calculations.
Understanding the Buyer Mentality
A buyer today understands how ripe the market is in terms of the potential for new business opportunities. However, there is a significant difference between what they want and the amount that they will actually pay. Like any buyer, they want the most for their money, but the complexities of the business world may elude some of them into not considering all the factors that makes for the right purchase.
It’s not just about the performance of a business, but all the risks that need to be addressed as well. Expect when selling your business to have it appraised for its total value. Remember that it is far better off to be open and honest to the buyer rather than try to hide anything.
Buyers generally are looking to the future when they purchase a business. They want a clean financial sheet, excellent growth potential, an easy transition to running the company and as little risk as possible. Most importantly, buyers want to purchase businesses with systems. If the business relies on your presence to run, how can you sell that business? Read the E-Myth Revisited by Michael Gerber to learn more about the importance of systems. While not all of these factors may be fully met to their complete satisfaction, there must be enough to entice the buyer to take a chance on purchasing your business.
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