If you are considering selling your business, your first step should probably be to find a business broker. A broker, as well as other business transaction professionals like business attorneys or business transaction CPA’s, can be vital to a smooth business sale. Even if you have already retained the services of a broker, it is important that you do some research on your own into the business market you are entering as well as the type of buyer who would potentially consider your business.

Knowing the market is important first and foremost because it will help you to have realistic expectations about your business sale, such as price and length of time on the market. Use industry publications and your broker’s market knowledge to discern if your industry is in a growth or slowdown phase.

A prospective buyer will be more interested in a business with the potential for growth. Even in a time of economic slowdown, you can market the growth potential of you individual business by highlighting ideas you may have had for growth but did not have the financial means or time to implement yourself.

Keep in mind that the economic state will affect the price your business ultimately sells for as well as how long it is on the market. Doing your homework in this area will help you to have realistic expectations and will also prepare you for any issues down the line.

Knowing who your potential buyers will be is instrumental for a successful business transaction. One source of potential buyers that many owners discount is a competitor or someone with a similar business model. Maintaining confidentiality is important in a transaction, but don’t discount a competitor who is looking to expand- they might be a great potential buyer for your business.

The other typical form of business buyer is someone looking to become a business owner as business investment. Those who are investing in a new business venture are mainly interested in what kind of return they are going to get for their money, so be aware of this aspect of the buyer’s perspective. Your business may be your baby, but don’t be offended when it just comes down to the numbers for a buyer.

Ultimately it will come down to your level of patience and your expectations if you would like to have a smooth business selling experience. Knowing your market and your buyers will help.

Have you recently sold your business in the down economy or did you sell to a competitor? Share your experience with us and with other business sellers here.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com