Small business owners are great at what they do. They own and operate a business that they have built into a success. When it comes time to put the business on the market, however, many small business owners make mistakes that will end up costing them a great deal of time, energy and money. How do you avoid these types of mistakes? Know what they are and how to avoid them. What follows is part two of a five part series that will help you avoid business seller blunders:

Choosing the Wrong Business Broker

The most successful business sales have something in common- a business broker (or brokers) that know what they’re doing. As a small business owner, you could potentially go out and find plenty of brokers who will list your business for whatever price you demand. The problem with this approach is simple. Your business is worth what someone is willing to pay for it, and a good broker will use market knowledge and a good dose of reality to price your business so that it will sell. Too often business owners will end up with a broker who will tell them anything they want to hear as long as they get the listing. This can become a major issue when your business is priced too high. It will sit on the market and you will wonder if your broker is doing anything to get your business sold.

It can be a hard pill to swallow if your business won’t sell for what you’d like to get for it, but an honest broker will tell you if your desired price is unreasonable or not. A goods broker will also tell you if there are any minor tweaks or fixes you can do to get top dollar for your business.

Another common issue is time. A broker who will let an owner list their business for a completely outrageous price will also likely give a very unreasonable time table for the close of the transaction. The average time it takes to get a business from listing to closing is 9 months. Do businesses sell faster than the average? Sure, but if a broker is giving you any kind of guarantee on a short time frame to closing, you should be suspicious.

The key here is to choose your broker wisely. Ask good questions like: How many businesses have you closed in the last 12 months? What do you think is a realistic asking price for my business and why? How long will it take to sell my business? A great broker will have great, honest answers. A so-so broker won’t.

Have you had a terrible business broker experience? Please leave us a comment or question here, and we will be happy to show you how our services are above and beyond the rest.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

Small business owners are great at what they do. They own and operate a business that they have built into a success. When it comes time to put the business on the market, however, many small business owners make mistakes that will end up costing them a great deal of time, energy and money. How do you avoid these types of mistakes? Know what they are and how to avoid them. What follows is part one of a five part series that will help you avoid business seller blunders:

Procrastination and Business Life without an Exit Plan

If you want to sell your business the first thing you need to understand about the small business market is that business sales are not instantaneous. The average time that it takes to sell a business can vary greatly depending on the business sector, but a typical time line from listing to closing can be around 9 months to a year.

What this means for you is that you will need to prepare and plan way ahead of time if you would like your business to sell before a certain date or event. It is also important to remember that there is no guarantee that your business will sell by your goal date, but you will greatly improve your chances if you are ready.

A long-term plan for the ultimate sale of your business should technically start the day you open your doors. No one lives forever, and at some point you will need to deal with the end of your relationship as the owner of your business. If you have not been planning for this since day one, it is not too late to start.

Keep your records up to date and in a format that can be analyzed by a potential buyer (A huge box of crumpled receipts will not work!). Make sure all of your financial records, business history, and sales information is easily at hand if needed (If the right buyer walked into your life tomorrow, do you really want to have to tell them that you have no idea where your past three years of tax returns have gone?).

With every successful business transaction, there is a window of opportunity that you will not want to miss. The perfect buyer might be ready to buy your business two weeks from now or 12 months from now. The key to success is to be ready and have a plan in place.

Are you a small business owner who hasn’t given much thought to an exit strategy? Do you have additional question about how to make your business ready for an eventual sale? Leave us a comment or question here, and we will get your questions answered.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

Small business owners are great at what they do. They own and operate a business that they have built into a success. When it comes time to put the business on the market, however, many small business owners make mistakes that will end up costing them a great deal of time, energy and money. How do you avoid these types of mistakes? Know what they are and how to avoid them. What follows is part one of a five part series that will help you avoid business seller blunders:

Procrastination and Business Life without an Exit Plan

If you want to sell your business the first thing you need to understand about the small business market is that business sales are not instantaneous. The average time that it takes to sell a business can vary greatly depending on the business sector, but a typical time line from listing to closing can be around 9 months to a year.

What this means for you is that you will need to prepare and plan way ahead of time if you would like your business to sell before a certain date or event. It is also important to remember that there is no guarantee that your business will sell by your goal date, but you will greatly improve your chances if you are ready.

A long-term plan for the ultimate sale of your business should technically start the day you open your doors. No one lives forever, and at some point you will need to deal with the end of your relationship as the owner of your business. If you have not been planning for this since day one, it is not too late to start.

Keep your records up to date and in a format that can be analyzed by a potential buyer (A huge box of crumpled receipts will not work!). Make sure all of your financial records, business history, and sales information is easily at hand if needed (If the right buyer walked into your life tomorrow, do you really want to have to tell them that you have no idea where your past three years of tax returns have gone?).

With every successful business transaction, there is a window of opportunity that you will not want to miss. The perfect buyer might be ready to buy your business two weeks from now or 12 months from now. The key to success is to be ready and have a plan in place.

Are you a small business owner who hasn’t given much thought to an exit strategy? Do you have additional question about how to make your business ready for an eventual sale? Leave us a comment or question here, and we will get your questions answered.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

If you are putting your business on the market, you should realize that at any given time there are a lot of other businesses for sale. What will make your business stand out in the crowd? A lot of that is up to you.

If you are a serious business seller, there are a few questions you should be prepared to answer.

(A caveat here, if you are answering any question from a prospective buyer, honesty is the best policy. Someone who makes an offer on your business will get a due diligence period before the close of the sale to go over everything in your business with a fine-toothed comb. Any deception found during this period will likely kill the deal, and even if it doesn’t, it will breed distrust between you and the buyer that will have to be endured for the duration of the transaction as well as the duration of any training and/or consulting period.)

Question #1: What do you do to grow your company?

A good business owner is never content with just the status quo. A great way to help a prospective buyer decide on your business instead of the competition across town is to tell them what you do to keep the business growing.

Question #2: What do you do to stay ahead of the competition?

Buyers want to know that they will have a fighting chance against your competition from the moment the business changes hands, so let them know the strategies you have put in place to stay competitive in your market.

Question #3: If you suddenly had an extra $100,000, what would you do with it?

This question is all about showing that you are and have been a business owner with a vision for the future of your business, a future that a new owner will get to embrace. Answer this question by highlighting the things you would love to do, but have not had the time or resources to accomplish yet.

Are you a prospective buyer who has asked any or all of these questions? Are you a seller who has questions about how best to answer questions like these? Leave us a comment or question here and we look forward to assisting you with your business transaction needs.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com