Someday the time will come when you are ready to sell your business.
Maybe you want to retire, have become ill, or maybe you're just ready to move onto other things.
Whatever your reason, selling a business is an involved process. It can be made much easier if you follow some simple to follow steps.
Read this article and learn how to get your business sold...
GET YOUR FACTS AND FIGURES READY
All interested buyers in your business will want to see your business figures–your cash flow, annual sales, operating expenses, equipment inclusions, asking price, etc. Gather all of the documents necessary and have them ready. Take photos of your business, your equipment–everything that will be included in the sale. You will need all of this information when you start the promotion and marketing of your business.
HOW DO I SET MY ASKING PRICE?
This is probably the most sought after answer by everyone selling a business. This is a tough question with no easy answer. An old "rule of thumb" selling price "estimator" that is sometimes used is 2.5 to 3 times the cash flow. This may be used as a "ball park" estimation but has no real scientific basis for establishing a selling price. If it is possible (and applicable for your type of business), it is better to use a "comparables" method. If you are in a business where competitors with similar values as yours have sold recently in your area, you can compare their selling price to help establish your selling price. Using the "comps" method is popular in real estate transactions. Seek advice of experts and take your time in setting your selling price. Remember that the sale will almost always involve bargaining on the price, so set your price accordingly.
PROMOTE THE SALE OF YOUR BUSINESS
Finding prospects is the name of the game and reaching prospects via the internet is one of the best ways today. Buyers search the internet to find out the information they want and they want to find things quickly. There are several websites that are very useful to find prospects for your business. Take a look at Ebay, BizBuySell.com, or BuyBusiness.com. Research websites to list your business by doing an internet search for "sell your business." If you want to restrict the sale of your business to local buyers only, look into advertising in local business newspapers and general circulation newspapers in your area. You may also want to have your business for sale listed in commercial "real estate books" as well. This will require that you sign up with a sales agent. See below for details.
CAN I DO IT MYSELF OR DO I NEED A BROKER?
This is a question that can best be answered by the size of your business and the amount of personal involvement that you are willing to expend.
Many small businesses can often be sold by the seller alone. A large business will most likely require the services of a broker. A broker (or local real estate agency) will list your and promote business for sale for a fee. Expect to pay anywhere from 8 to 10% of your selling price.
It is not essential that you use a broker. No matter how you how you decide to sell your business, it is recommended that you consult with a competent legal adviser for advice. Let them look over your agreement of sale and all of the important documents relating to sale of your business.
In a soft economy, it can be difficult to get your business sold. It may be difficult and take longer, but it is not impossible. Be persistent and don't give up. There is almost always a buyer for a profitable business. Be patient.
Being careful about disclosing sensitive information about your business is very important. Often, competitors and others may want to find out "inside" information on a business. Protect yourself. Screen all prospects carefully. Use a confidentiality agreement requiring non-disclosure of information and require completion and submission of a financial qualifications form to weed out spies and scammers. Consult with a competent legal adviser to provide additional guidance on this important subject.
"PACKAGE" YOUR BUSINESS FOR ONLINE SELLING
Build (or have built) a custom website to showcase your business. Let your prospects learn about your business by just "clicking away." Having a "business for sale" website will answer most of the questions that prospects want to know about your business. A custom "business for sale" website will save you much time by not having to answer the same questions over and over again.
GET IT SOLD
By following the guidelines above, you can make the business selling process much easier. Consider the six "P's for selling a business: Preparation, Price, Promotion, Persistence, Protection, and Packaging. These are the keys to success. Implement them properly and get it sold!
ASPA Staff and others