Business Brokers - Sell Business - Business Sales and Acquisitions - SunbeltNE

Selling a business is no child’s play and it is essential that all business owners follow these crucial steps to minimize the risks involved and ensure smooth selling process with possibilities of bargaining a better sale price.

Tip # 1:
Resolve current financial or any other business related problems thoroughly and as soon as possible. Especially in case of partnership business, it is essential all partners involved are in agreement of selling and there can be no future hindrances from any partner.

Tip # 2:
Get your financial records in place. See its up to date and accurate with impressive indicators highlighting your business in positive light. Ensure there is no manipulation of accounts and your records are true and fair. Its difficult to hide facts and its better to be open about them right from the beginning.

Tip # 3:
Be open to finance the sale. The quickest way to break a negotiation process during sale is refusing to finance part of the sale. It sends a clear indication that you don’t trust your business to earn enough to pay you back.

Tip # 4:
Scout for a professional business advisor or business broker. The professional ones earn every penny of their commission by helping you handle the technicalities associated with selling a business along with helping you keep your emotions under check. Your burden is almost halved when you hire an experienced business advisor.

Tip # 5:
Understand the different types of buyers to gain insights on what motivates each one of them.

• Strategic acquirer: They pay the highest prices, usually in cash. They buy for strategic reasons such as economies of scale and market share.
  


• Sophisticated or Corporate acquirer: With backgrounds in corporate America, these buyers examine a business closely. Size is less important than opportunity. They review several businesses before selecting one.
  


• Financial buyer: These are the most plentiful. They will not pay prices based upon projections. So they will not pay top dollar. These groups expect terms or the ability to finance the buy.
  


• Industry buyer: These can be the best or the worst. The best, when they have a strategic reason to buy. Otherwise, watch out! Most industry buyers look only to selected assets to determine value; they do not pay for goodwill or future prospects.

Tip # 6:
Prepare a good marketing plan to sell your business at the best possible terms. Be prepared with information on:

• Customer concentration: A heavy dependency on a single customer decreases the value of the business in proportion to perceived risk. It is better to have a larger and diversified base of customers.
  


• Margin Maintenance: Show how you manage costs and measure profitability.
  


• Credible Projections: Support with evidence your expectation for stable and increasing profits, so the buyer can see the opportunity in the business.
  


• Stability of Tenancy: Secure leases to eliminate relocation worries.
  


• Risk Perception: Anticipate situations that might raise a perception of risk.

An experienced business broker will help in preparing all of the above along with a good marketing plan to ensure that right buyers are attracted to your business.

Tip # 7:
Always maintain secrecy. It is essential not to create panic among your present employees, or give a reason for your customers to dessert you or provide your competitors undue advantage. This is also one of the reasons why business brokers are very essential during a sale of business. They ensure the confidentiality of both the parties involved

Selling a business is a skill that is acquired after repeated experience and gaining in-depth knowledge of various fields. It is more than just putting an advertisement on the internet, in a newspaper or spreading the word around. If you hope to get the right price based on business valuation, you will definitely have to do your homework and seek professional help on time.