You might be one of the best in your field. You’ve taken a small business and created a stunning success. What you are not, however, is a business sales expert.

When the time has come to put your business on the market, you might think that selling your business will be far easier than running your business on a day to day basis. It isn’t.

If you are considering selling your business, there are a few common misconceptions that you will need to banish from your mind if you hope to have a successful sale. These misconceptions derail many business sales simply because business sellers get hung up on what they think the experience of selling their business should be like instead of embracing the reality of what it will be like.

Knowing ahead of time what you can expect can be instrumental in getting your business transaction all the way to the closing table. Here are a few of the most common misconceptions we hear from business sellers along with the reality behind them:

My business can sell as-is.

No, it can’t. It takes a lot of work to get a business ready for the market. Think about selling a house. You get the carpets cleaned, repaint all the walls, get the landscaping done and stage the house with furnishings. You business will need the same kind of once-over too. You will need to reorganize your financial records to make them easy for a buyer to read and understand, you will need to collect any necessary documentation like contracts, leases and the like, and you will need to make any necessary repairs. A good thorough cleaning never hurts either. The point is, you only get one chance for a first impression with buyers, so help your business be at its very best.

Buyers will beat down my door.

No, they probably won’t. Yes, it has happened that a business went on the market and sold almost immediately, but that is the exception rather than the rule. In most cases, it takes around 9 to 12 months to get a business from listing to closing, but in the business market every situation is different. Once your business is listed on the market, it will take time to find the right kind of buyer, get through the negotiations and complete due diligence. Patience is the key.

My listing price is so good, there will be a huge bidding war.

Again, no. Many business sellers see their business as an extension of their life, and therefore don’t see their business very objectively. Sure, you would pay whatever you want for your business, but that’s not who’s buying. Buyers are going to be taking a very objective look at something that means a lot to you, and almost always your listing price ends up as a starting point for negotiations rather than a final sale price. The full-price, all-cash offer is extremely rare. What else is rare? Bidding wars. While it does occasionally happen that a business will generate more than one simultaneous offer from buyers, it is far more common for a seller to negotiate with only one buyer at a a time.

If this buyer won’t pay me my full listing price, I can wait. I’ll get more for my business next time.

Yes, this one is probably wrong too. Timing is everything in business sales, so sellers who walk away from great buyers making a very fair offer will likely have trouble finding another buyer who is willing to pay more. Treat every offer, no matter how ridiculous you think it is, as a starting point for negotiations. You (hopefully) didn’t list your business for the exact amount you are willing to take. Likewise, most buyers will come in lower than their final number to see where the negotiations take them.

I only want an all-cash offer. I will accept nothing less.

Well, then you probably will have a really tough time getting your business sold. Sure, the economy is worlds better than it was a handful of years ago, but that doesn’t mean that it is easy for buyers to come up with very large sums of cash or find some kind of traditional financing. Most deals involve some seller financing, and by agreeing to offer seller financing to the right buyer – you will put your business ahead of those sellers who won’t.

The prevailing theme with all of these misconceptions? A good hearty dose of reality. If you enter the business market with a realistic attitude and some professional help (like a business broker) by your side, you will have a far greater chance of success.

Are you a business seller who is ready to enter the market, but you have questions about what the process will really be like? Please feel free to leave us a comment or question here, and we would be happy to help.

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907

https://infinitybusinessbrokers.com