Showing posts with label selling your business. Show all posts
Showing posts with label selling your business. Show all posts

Avoid these errors while putting up a company for sale

Friday, July 23, 2010 by Mark , , , ,

Listing your company for sale is one of the hardest decisions you will make. After all, you must have put in many days and nights of dedicated efforts into it and letting go of it is a tough call. Having worked hard to bring your business to a certain level, you would also want your company for sale to go in the right hands. Selling to the wrong person or botching up the selling process can seriously jeopardize your business. So here are some of the common errors of selling a business that you can keep in mind when you put up your company for sale.

Expecting the wrong price

Most business owners make the mistake of either over-pricing or under-pricing their business when they put it up on the market. A potential buyer will examine your company for sale through its profitability, turnover and future potential and then determine the price he/she is willing to pay for it. Over-pricing your business will put off the buyer even before you reach the negotiations stage. Under-pricing, on the other hand, will create unease in the buyer’s mind as to the feasibility of the business for sell, and will delay the whole process even more. Work with a business broker to determine the true value of your business and prepare yourself for the price to expect for your company for sale.

Selling at the wrong time

The past two years have been the toughest in recent times, with buyers reluctant to part with their money even for a viable company for sale. The timing for selling your business is one of the most important factors in closing a deal. You should also keep in mind that selling a business when it is incurring losses is a bad idea. You should, in fact, consider putting up your company for sale when it is at its peak and profit levels are the highest. That way, you can negotiate effectively and obtain a good price for your business for sell. Keep the idea of selling your business in mind always, so that you can grab the right opportunity when it comes by.

Insufficient financial documents and information

You need to help a potential buyer to make a decision about your company for sale. For that, you need to have all financial information at hand so that when the buyer needs it, you can provide it immediately. Such prompt action will help the buyer analyze the business for sell quickly and make a decision. Lack of such important documentation is an immediate deal killer for most buyers. Ask your business broker for a list of all documents you need to keep ready before a buyer visits you on-site.

Selling in haste

You may be tempted to accept the first offer you get. However, making the decision in haste is a bad idea. Ideally, you should have multiple offers on hand so that you can negotiate strongly and get the best price for your company for sale. Consider all the offers you have with your business broker’s assistance and then decide on the best one of the lot.

Not using a business broker

The guidance of an expert business broker will go a long way in closing a successful deal. By not using such an experienced professional’s services, you risk elongating the business selling process and selling to the wrong buyer. Moreover, the business broker can focus totally on selling your business while you carry on with the everyday business activities of your company for sale. The commission you pay to the business broker will be totally worth it when you hand over your business to the right person.

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5 Mistakes to Avoid while Selling a Business

Monday, January 25, 2010 by Mark , , , ,

Selling a business is not an easy task; it takes a lot of preparation, patience and the careful guidance of an expert like a business broker to close a successful deal. If you are thinking of selling a business but have never done it before, you are bound to make some mistakes. The following are some common mistakes made by sellers, which you can be aware of and avoid:

Mistake #1: Not knowing the process for selling a business

The number one mistake you can make while selling a business is not being aware of the process. You don’t have to be an expert at selling a business, but as a seller, you need to be aware of the steps you need to take for closing a successful deal. You might get a lot of help with a business broker, but as an owner of a business for sale, you need to know how the selling process moves.

Mistake #2: Setting the wrong price

A major mistake many sellers make while selling a business is setting the wrong price. High expectations and enthusiasm lead a lot of sellers to over-price their business for sale. Always keep in mind that a buyer has his own team on his side, which guides him all the way through; he is not likely to fall for an over-priced business. A business for sale deal is also under-priced many times in the hope of selling a business quickly. This is also a mistake, as it makes the buyer suspect that something is wrong with the business, or else you wouldn’t under-price it. The right way to price a business is getting business valuation done through an expert, so that you can set the right price and your business for sale is sold successfully. Your business broker will know of a good valuation firm for your business for sale.

Mistake #3: Not maintaining confidentiality while selling a business

If you declare openly that you are selling your business, you may face problems with employees and vendors. Once word spreads that your business is up for sale, your competitors may also take undue advantage by trying to steal your clients. While selling a business, try to take only trusted people into confidence, rather than telling everyone. Select a reputed business broker who is experienced in selling businesses and can maintain confidentiality.

Mistake #4: Not developing the business after it is put up for sale

Once you have decided that selling a business is the best step you can take for yourself, it may be very tempting to stop making the everyday effort to develop your business. After all, the new owner will take care of it pretty soon, right? WRONG! Ignoring everyday activities of business and ignoring growth possibilities is a mistake many sellers make while selling a business. Remember that it may take up to a year for selling a business. If you ignore business activities for such a long time, the price you get for it ultimately will be lesser than what you expect. So keep running your business as usual if you want a good price for it in the end.

Mistake #5: Not hiring a professional business broker

The benefits of using a business broker have been stressed on time and again by industry experts. Not only does the business broker know the process of selling a business like the back of his hand, he will also have contacts which will help you close a successful deal easily. In today’s tough market, not hiring the services of an experienced business broker can be a huge deterrent for selling a business.

Keeping these mistakes in mind will help you avoid them and will make you a more confident seller while selling a business. Your business broker will be able to guide you further if you have additional questions.

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Should you use a business broker to sell a business? Definitely yes!

Friday, January 8, 2010 by Mark , , ,

You’ve probably started and grown your business for years before deciding to sell it. Once you have decided to sell your business, you need to determine whether you want to do it yourself or hire a business broker. Most industry experts will advise you to hire a business broker; and it is the right advice. Hiring a business broker for your business for sale is the right step for you if you do not have previous experience of selling a business. If saving the commission payable to the broker is on your mind, think again: nothing beats the advantages a business broker can offer you.

The Pros of working with a business broker
  • A business broker has the relevant experience that is required to close a deal. He/she is familiar with the steps to be taken and knows the process in-depth. This experience plays a crucial role in avoiding mistakes and taking the necessary steps to close a successful deal.

  • Experienced business brokers have an established network within which to advertise your business for sale. They will most probably already have a list of buyers on the lookout for a profitable business for sale. This means that as soon as you register your business with a broker, it will immediately be made visible to interested buyers. Such visibility not only increases the chances of closing a quick deal, but also relieves you of the headache of looking for the appropriate buyer.

  • Business brokers are experts at negotiations. You just have to set a realistic price for your business for sale and the business broker will focus all his/her energy and resources to get that price for you.

  • You can hand over the responsibility of selling a business to the business broker, which will allow you to focus totally on your business. Remember, even when you have decided to sell, the business should remain profitable.

  • The business broker you hire will also know other professionals whom you will need during the sale of the business like a solicitor, a professional for business valuation, accountant etc.

  • When you sign an agreement with a business broker, he/she agrees to keep the news that you are putting up your business for sale confidential. You can hence rest assured that your employees, competitors or clients will not know that you are selling your business.

After you decide to hire a business broker, the only thing you have to do is find a reputable and experienced one. When you find and hire one, you can sit back and relax, as the business broker uses his/her experience for closing a successful business for sale deal.

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Consider These Prep Steps Before Selling A Business

Tuesday, December 29, 2009 by Mark , , ,

If you think that you can go about selling a business with ease when the time comes, think again. A lot of preparation goes into selling a business, and you have to start well in advance if you want to close a successful deal. Even if you have a business broker helping you out with the process, there are some basics that you need to take care of. The following are some of them:

Be clear about the reason for selling a business

One of the first questions any buyer will ask you is the reason for selling your business. A buyer might wonder: ‘If the business is good, why is he/she selling it?' You need to explain your position clearly to the buyer. Your reason for selling a business may be retirement, need for money or a change in profession. Whatever the reason is, be articulate and explain it to the buyer and business broker, so that you are on the same level as him/her.


Get valuation done when selling a business

Getting your business valued guides you very well while you are selling a business. You can go to an expert valuation firm which will value your business and help you know its worth. If you don’t know which valuation firm to use, you can consult with your business broker, who will know a reputed professional to get your business for sale valued. Knowing the value of your business will help you price the business and know your market position while selling your business.


Price your business for sale reasonably

Set a price of your business for sale on basis of your business valuation. Many sellers make the mistake of pricing their business atrociously in hopes of finding a buyer who will fall for it. You should know that buyers are becoming savvy in their research and are using business brokers from their end as well, who will know the approximate value of your business for sale. While selling a business, price it reasonably, so you are able to attract serious offers from buyers.


Consider the matter of succession

After selling a business, will there be anyone the new owner can consult for advice in the beginning? You should have a trustworthy person in your business, who can help the new owner settle in. Many business for sale owners offer to stay for some time after the sale, so that issues like training, consultation etc. can be taken care of easily.


Take care of routine business

Once the decision of selling a business is taken, don't ignore your core business activities. Keep focusing on routine business even when you know you are going to sell business. You can hire an experienced business broker to take care of the promotion of your business for sale, so that you can continue running your business profitably.


Hire a business broker

A business broker is going to be crucial in closing a successful deal. Business brokers know the process of selling a business properly and will be able to guide you each step of the way. Not only will a business broker have a list of people looking to buy a business, he/she will also be in touch with other professionals like valuation firms, accountants etc. whose services you may require while selling a business.


The above mentioned are only some of the steps you need to take to ensure you are well prepared for selling a business. A professional business broker will be able to guide you further in this regard.

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