Ontario Business Brokers
Business for Sale in Toronto, Hamilton and surrounding areas in southern Ontario, Canada. We are a full service business brokerage here to help you buy or sell a business.
If you are a small business owner thinking of selling your business you may have many questions about the process and how to go about doing it. The business sale process is quite unique (much different than selling real estate) and there are many misconceptions.
Selling a small business is a different process than selling a medium-sized business – the transaction is usually much more emotional for both the buyer and the seller. Also, the buyer is typically looking to “buy a job” – or perhaps to replace a job. That being said, they need to feel right about the purchase. As a business owners of a small company there are a few things you can do to help a buyer feel more comfortable about your small business.
The purpose of this article is to outline some of the things you can do to help your chances of selling a business.
Deal with a business brokerage professional
Many times business owners contact a “real estate” professional when they want to sell a small business and do not even consider contacting a "business broker" – or a person focused in the field of business brokerage. Selling a piece of real estate is much different than selling a business so deal with a professional focused in business brokerage.
Get your books in order
Selling a business entails having financial information readily available. Buyers will ask for this so please be prepared. Also, a business broker will need financial information in order to assist you to determine a listing price for your business. Talk to your accountant in order to get ready early in the process.
Claim your “cash” sales
Many business owners claim that their business is a “cash” sales business and have no supporting paper trail. This is highly unadvisable for a number of reasons. If your business is in fact a “cash” business then get prepared early – start claiming your “cash” sales for 6-12 months prior to listing it for sale in order to prove to a buyer that such sales are real.
Keep your small business neat & tidy
If you are serious about selling your small business then tidying up your business, removing clutter or perhaps adding a coat of paint can mean a lot in the eyes of a business buyer. An owner that takes care of their small business is perceived as a responsible seller and builds goodwill with buyers.
Make sure machinery works
If your business has machinery and equipment please ensure that it is operational and properly maintained prior to showing it to prospective buyers.
Be realistic about the timeline and price
Selling a small business can be an emotional journey for a business owner. Often, the seller’s expectations about the price are too high and can ultimately hurt the chances of finding a purchaser. Also, Selling a small business is a process that can take several months to consummate. Selling a business usually takes much longer than selling real estate so please be realistic that the process may take a while. There may be some false starts along the way or perhaps even accepted conditional offers that fall apart during the due diligence process.
If you would like to sell your small business please contact our business brokerage. We assist small business owners across southern Ontario from Toronto to Hamilton.
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