In a perfect world, every business seller would list their business and get an all cash, full price offer the next day.
In reality, this is rarely the case. Like, it never happens that way.
On average, it typically takes nine to twelve months to get a business from listed to sold.
As a seller, there are three very basic (but also very simple) things you can do to improve your chances of selling right out of the gate.
Offer Seller Financing
Banks and other more traditional lending institutions have always been gun-shy about small business loans – and the 2008 recession didn’t help. There are always a lot of buyers who are looking for new business opportunities, but they typically don’t come with a lot of cash on hand. By offering to finance part of your purchase price, you will be able to attract many more buyers than you would otherwise. Worst case scenario if the new owners fail? You get to to keep the sizable down payment the buyers put up and you get the business back.
Hire A Business Broker
You might be great at what you do, but what you do isn’t helping people buy and sell businesses. This is what business brokers do for a living. They know the business transaction process inside and out, they have access to buyers you could never find and they are experts in confidential business marketing. Going it alone won’t save you money. It will more than likely mean you either won’t be able to sell at all or will end up having to take far less for the business than if you had hired the right help.
List For A Realistic Price
Your business is only worth what someone is willing to pay for it. When deciding on a listing price many sellers try to set a price that will recoup all of the money they have invested over the years or use the value of new equipment when determining what their 10 year old stuff is worth. We get that you have invested a great deal of your time, money and energy in your business. You can absolutely get a good return on that investment, but you need to be realistic. Your business price should be based on your cash flow, what your equipment and inventory are actually worth and what the market will currently allow. Making a sensible and well-informed decision about listing price is key if you ever want to see a closing table.
If you think you are ready to sell, go into the process with an open mind. Have realistic expectations, and use the experience of your business broker to help you set realistic goals for your transaction.
Do you have questions about how to price your business? Would you like to know what businesses like yours are currently selling for? Ask us! Leave any questions or comments here and we would be happy to help.
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