How to Increase Your Chance of Selling a Business
How to Increase Your Chances of Selling a Business
Selling a business is a complex and often contradictory process. For example, sellers normally don’t want customers, employees, landlords, suppliers, sometimes immediate family and others to find out their business is for sale in case it might damages the business. Yet they need everyone else to know it’s for sale so they can get the highest price possible.
Why a Business Doesn’t Sell
Here are 8 reasons why a business does not sell and what you can do to increase its chances of selling.
- The seller starts off thinking he is serious about selling but gets into the process and sees how difficult it can be and then changes his mind.
- The seller fears having nothing to do after the sale and changes his mind. Going to work and running the business provides structure and familiarity. Once the business sells, that will go away and so fear stops the seller from moving forward.
- Receiving few or no offers after listing the business for sale. The seller thinks he may not get what the business is worth and removes it from the market.
- The next phase of life the seller had planned, such as going back to school or looking after the grandkids, suddenly seems less appealing than continuing with the business.
- The seller thought he had the best business in the world and would receive all cash. When that doesn’t happen, he decides not to sell.
- Due diligence disclosed an environmental, government or legal issue outside the risk tolerance of the buyer.
- The seller wants too much for the business and isn’t willing to accept what the market is willing to pay.
- The seller cannot provide the necessary books and records to support income, expenses, and profit they claim the business has.
Do you have other reasons you can add to the above list?
Your thoughts and comments are always welcome.
Preventing those Reasons from Derailing Your Business Sale
- Understand difficulties right away. Make a plan to deal with them, and hire a business broker to help.
- Make a future plan before you put your business up for sale. Stick with it and make sure it is something you look forward to.
- Be patient. It takes time for a business to be discovered. The right offer will come with patience.
- See #2. Make sure your future plans are what you really want to do before you decide to sell your business.
- Know the types of business sale and what to expect at closing. As questions of a professional business broker.
- Do your own due diligence ahead of time. Know the issues you might have and be upfront with buyers before they even make an offer.
- Know your business worth and its market value before you put it on the market, and be realistic.
- Prepare your business for sale by recasting your books and making sure they are ready for buyer review.
There is a risk that goes with selling a business, so increase your chances of selling one by being prepared.
Are you thinking about selling your business and move to your next challenge? Would you like to know the value of your business? If you would like more information please visit this article on business valuation to learn more
For more immediate help you are welcome to send an email to Andrew Rogerson or call (916)570-2674.