When it’s time to sell your business, you need to consider a few points in order to fully prepare for one of the biggest business decisions you will make.
First and foremost, you will need to determine what your priorities will be in regards to your business sale. What are some non-negotiable sticking points that you will want in place before any discussions begin with a buyer? You will want to be upfront with these, make sure your business broker knows right off the bat where any lines in the sand need to be drawn. On the other hand, what aspects of a business transaction will you be willing to negotiate or be more flexible on? Be sure that this part of your game plan is firmly in place between you and your broker from the very start and you will be more likely to end up in a better position come closing.
Second, decide what type of deal you are prepared to make. Are you going to be a seller who requires all-cash up front, or would you be open to some kind of seller financing? A word to the wise in this economy, all-cash offers do exist, but are few and far between. If you really want to sell your business, seller financing is a much more realistic way to bring in buyers. Discuss this point with your business broker.
Third, are there any ties to the business that you would want to remain in place? Do you have a child or relative working in the business who wants to stay on as an employee even with a new owner? How long of training and/or consulting period are you willing to agree upon? These types of details should be handled at the beginning of your business sale journey instead of at the end, so be sure that your business broker knows these important details.
Lastly, (and probably foremost in your mind as a seller) what is the minimum price you are willing to take for your business? This is a problematic point for many sellers, as the actual selling price of your business isn’t necessarily what you would want it to be, it is what someone else is willing to pay for it. Before you get a number stuck in your mind, have a serious talk with your business broker about what a realistic asking price should be, and also where the line would be in negotiations about bottom line offers. Be wary of a broker who is willing to list your business for whatever price you want. If priced too high, your business will just sit on the market indefinitely. By having realistic and well thought out expectations on price, you will not only be more likely to sell, you will be much happier with the end result.
Are you a business seller who has questions about business sale priorities? Do you have your business listed at a price that doesn’t seem to be generating any action? Please leave a question or comment here, and we will be happy to assist you.