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5 things to consider if selling your business

Guest post by: Andrew Rogerson

Article Overview: Selling a business requires not only preparing the business for sale, but also what you do as the owner. The following are 8 tips for you to consider if you want to successfully sell your business.

5 things to consider if selling your business

Selling a business has many moving parts and as a result is very complex. Here are 5 suggestions that may make the task easier.

1. Get a professional third party valuation This may sound obvious but naturally the seller wants as much money for the business as possible and the buyer wants to pay as little as possible. The place to meet is probably the "Warren Buffet place" with apologies to Warren Buffet. He's on record as saying or something close to it - I would sooner pay too much for a good company than get a great deal on a company that won't be around much longer.

2. Hire a qualified professional that you trust Selling a business is not a quick or normally straightforward process. Each business has its own unique characteristics and is part of the dynamic global, regional and local economy as well as the specific industry it is in. Because of the complexities, ensure you have a qualified professional on your team that you trust and have complete confidence in. Apart from trust, other important components to look for include the professional qualifications from the International Business Brokers Association (IBBA) such as the CBI or Certified Business Intermediary or the state business brokers association (if one exists.) Some states require a real estate license - ensure your professional has any necessary license.

3. Make sure the business is sellable So many owners plan on selling their business. As soon as it is on the market, they that stop doing the hard work that got the business to where it is now. Some even go on vacation. It normally takes about 6 ½ months to sell a business; if it sells. Make sure you continue advertising to your customer base, keep the employees motivated, continuing to check your customers are happy, pay your bills on time and most importantly of all, continuing to keep your landlord happy. The number one reason that a business won't transfer from the seller to the buyer is that there is a dispute between the landlord and the seller and/or buyer. If you need a vacation, take it before putting the business on the market. Once it's sold and you have trained the buyer, then it's time for that trip of a lifetime.

4. List the business for sale at or near the business valuation If you've owned the business for many years or recently spent a lot of money fixing a problem, it's not uncommon for sellers to want to ask as higher price as possible so they can earn back some of that money. Buyers have a large number of businesses to choose from. Because most businesses look similar or they are not emotionally attached to the business, they have little problem in walking away. A good business for sale is fairly priced and has good potential. A buyer is looking for potential. Too many sellers want to be paid for potential but that's the reason why the buyer is buying the business and is only willing to pay a fair price. The buyer is the one that will do all the work to take advantage of the potential; not have to pay the seller for it when they buy it.

5. Don't forget the Golden Rule The Golden Rule is - put yourself in the shoes of the other party. If you're talking to your buyer, try to understand what's important to them. If you are discussing your lease with your landlord, work out what's important to them. And so it goes. Lenders, business brokers, franchisors (if applicable) attorneys, accountants and others all have a role to play. Even family members. Selling a business is not an easy event at the best of times. It's even more difficult in a tough economy, if finance is tight, if key players have health issues and many other variables. Hence the value in hiring a professional you trust so to help guide you and keep all the moving parts lined up and managed.

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Article Tags: Andrew Rogerson, business, Business broker Sacramento, business escrow, business for sale, business plan, due diligence, exit plan, franchise, franchise for sale, Murphy Business and Financial Sacramento, Sacramento business broker, Sacramento business ownership, sell a business, Sell a business, succession planning



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Re: Which is the best for beginners? - Hi Apu, I think one good way for Internet beginners to start is to experiment with selling stuff on eBay. In my own case I began by making a website about Japanese mahjong and then tried selling some mahjong goods on it. It worked! Actually, I remember that before I tried selling mahjong goods I experimented with selling other kinds of thing such as Japanese comics on eBay and things like that. I only got into affiliate marketing later on, and used the money I was making selling goods to fund my experiments with affiliate and network marketing.
Due Dilligence - Hi Praveenv, I'm big on due diligence when exploring any type of business opportunity. One of the first things I would want to know is who else is is selling this distributor's products in their country? Would you be the first? I would ask for contact information for others who are selling his products in other countries, then contacting those parties and asking for input such as: 1. Do they pay in advance for the product, then sell it from their end? 2. Who takes care of customer service, returns? 3. Is risk equally assumed or does one party carry all of the risk? 4. Who makes up the target market for this product? 5. How are they best reaching members of that market? 6. Who are their biggest competitors and how do they differentiate their product from others? There are a host of questions to ask before proceeding with operational details. If I was satisfied with the information gathered, I would then seek out someone who is already doing what I plan to do. Someone else who is selling an overseas product using the internet -- and ask him/her for advice. Of course, legal guidance, etc. are a given. I'd make sure there are no assumptions and I have full understanding on what is involved before proceeding. (I've posted this reply in the first person because I simply want to give you a few things to think about -- not to tell you what to do. I can only recommend you do your due diligence and proceed with full knowledge of what is involved.) Good luck to you!
Ebay - It seems the thing I want to sell are dirt cheap - while the things I want to buy are attracting attention and driving the price up. I have a good friend who makes a very good living selling items on ebay and that's his fulltime job. But, I'm looking for suggestions for selling some items as a part time way to make some additional money. Chris
Re: 3 Business Lessons I Learned (and almost missed) - Hello Evan, I watched the video and it was great to listen to your story on how you become a successful entrepreneur! With me, I never wanted to be in business because the thing I most dislike about it is selling. Let's just say that I'm the quiet kind and trying to convince a person to buy isn't really something i enjoy. But now that I'm older, i am more open to it, but I really need to believe in the product or service before I can bravely try to do "selling". I'm also very scared with numbers. The accounting part of managing a business scares me a lot, I am sort of dyslexic but only with numbers. Still, it is great to hear about other people's success. Maybe, if we had something like the Junior Achievement business high school program here, it would have helped me to see the possibility of starting a business. Thanks for sharing your story. I think the lessons you learned makes a lot of sense and I'll try to remember them in case I ever find myself in a business:D
Re: How do you overcome the fear of rejection while selling? - Great video Evan, I have not worked in direct sales in the none Internet world, always in the service sector but many years back I worked as service manager for a national brewer here in the UK and the sales manager was fond of telling all his team that they should get used to rejection, it is part of sales. My own take on this has always been that some will, some won't, so what, move on !!. I find this is very true with Internet Marketing and I never take any rejection personally as it is not me that customers are rejecting but what I am selling or the way that I am selling it and both of these things can be improved, regards, Mal.


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