Usefull Tips for Selling a Business

Inadequate preparation will almost certainly cost you the sale of your business. If potential customers for the sale of your business experience any delays on requested information, they will usually be scared away, and who can blame them. If they feel you are not prepared for the sale, then how must you run your business? Which would lead them to think that maybe you are selling the business because it is not doing so well. Selling your business does not have to be a difficult exercise. If you do all of your home work before putting your business on the market, you will be one step closer to smooth and stress free sale.

Failing to identify the best buyer is another important point to remember. Sometimes if the sale of your business is taking longer then expected, or you are after a quick sale, you can waste a lot of time and effort by qualifying a potential buyer who is really just a tyre kicker, when this time could have been used with the serious potential buyers that have now lost interest. Understanding the buyer’s motivation is the key. Negotiating with the wrong buyer will cost you the sale of your business, so make sure you ask just as many questions as the potential buyer. Asking them if they have their finances ready is a great start.

Over-pricing the business will result in a reduction of interest and in some cases eliminating interest all together. Write down the price you want for your business and ask yourself why? How did you come up with this number? More often then not, business owners have an emotional attachment with their business, which can sometimes result in over pricing. Make sure you seek advice from your accountant, who will be able to give you a realistic business valuation. A business broker can also assist with this, as they are up to date with current market trends.

On the other side of the coin, failing to obtain full value of the business would be a real bummer! Always allow a 10% buffer to play with when the negotiations start. A potential buyer will never pay full value, and unless you are willing to negotiate, you might find that your business will sit on the market for a long time. Offering your services for a training period on hand over of the business is always a great incentive as it makes the customer feel more comfortable about running the business.

Structuring the deal incorrectly will also cost you the sale of your business. Make sure you have all relevant information on hand i.e. year to date sale, turn over, out going expenses, profits, assets etc. Having this information ready to hand over will save any embarrassment, and look professional.

Last but not least, ensuring your partner agrees with the sale of your business is vital! If they don't you've got problems!