Planning to Sell Business? 10 Tips You Cannot Ignore!

Recent economic meltdown might compel many small business owners to put their businesses for sale. With many layoffs due to the fall of three of the five major US investment banks, Bear Stearns, Lehman Brothers and Merrill Lynch, and other the two remaining banks, Goldman Sachs Group Inc. and Morgan Stanley, under siege, aspiring entrepreneurs will shoot up leading to larger buyer pool. If you were planning to sell your business you need to know how to leverage the best deal in the current slump.

Read the following 10 steps to avoid wrecking the deal:

1. Establish a reasonable price for your business. An inflated figure either turns off or slows down potential business buyers. Hire an expert business broker for business evaluation to avoid costly mistakes during business sale.

2. Continue with "business as usual." Obsessing about selling business to such an extent that your attention wavers from day-to-day demands, affecting sales, costs, and profits is not a good idea. Remember selling a business takes time, and your need your business listed in hot listings for sale to attract business buyers.

3. Hire business brokers to ensure confidentiality. A confidentiality breach during the sale of a business can change the course of the transaction. A professional business broker will ensure all parties maintain complete confidentially till the dotted lines are signed.

4. Prepare for business sale well in advance. Ensure business records are complete for at least several years back and do all pertinent legal or accounting "housecleaning"--as well as a literal sprucing-up of the plant or store.

5. Be prepared for business buyers questions. The buyer will need appraisals on all assets as well as all pertinent information to satisfy environmental regulations (when real estate is concerned). The buyer might request other information for sourcing finance to buy business.

6. Maximize leverage through competitive bidding. This is something you should let a professional business advisor handle as it can get tricky.  Business broker will create a competitive situation to position you to get most out of the deal.

7. Be flexible. Don't be the kind of seller who wants all-cash at the closing, or who won't accept any contingent payments or an asset transaction. Depend on the advice of an expert business broker - their knowledge of business financing and tax implications will ensure your deal is sweet instead of sour.

8. Learn to Negotiate; not "dominate."You're used to being your own boss, but remember the buyer also is used to having their way. Learn and follow your business broker’s council on when "to hold" and when "to fold."

9. Don’t over drag the deal. To keep the momentum up, work with your broker to keep your potential buyers interested and wrap the offer within a reasonable time. Don’t hold out for unreasonable demands.

10. Stay focused and involved. You might feel pressured and burnt-out. But realize that the buyer may want you to stay within arm's reach for a while. Consult with business brokers to determine how you can help them to sell the business without unnecessary hitches.