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"Top Ten Questions about Selling a Small Business"
| Guest post by: Mark Wood |
Article Overview: Answers to our most frequently asked questions about selling a small business.
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Free Download - "Top Ten Questions about Selling a Small Business" By Mark Wood |
"Top Ten Questions about Selling a Small Business"
Q. Should I be concerned about confidentiality while engaged in the selling process?
A.In many casesthe confidentiality of bothsellers and buyersis important during thetransfer of a small business, and is one of the many reasons to work with an experienced and professional Business Broker. We usually recommend that you do not disclose the pending transaction tovendors, employeesor customers until the appropriate time. The appropriate time can vary from case to case, but generally it is after theclosing processhas beencompleted.
Q. How much is my business worth?
A. Determining the most probable selling price for a small business is complex and is based on many factors, such as sales, earnings performance, market outlook, personnel, net book value and fair market replacement value of equivalent operating assets. It can also be influenced by intangible assets such as the company's image, reputation and goodwill, as well as the buyer type and terms and structure of the deal. Factors contributing to a positive industry outlook also can help to drive the value of the business and increase its marketability.
Q. How long will it take to sell my business?
A. There is a great deal of variation in the time frame, but theaverage time to sell a small business is in the four to twelve months range, fromlisting-to-close.
Q. I have a long term lease with my landlord.Should I be concerned about its transfer?
A. Transfer of the lease is usually critical to thesuccessful transfer of the business. Working with the landlord to enablea smooth transition is an important part of the process leading toa successful transaction.
Q. What generally happens to the cash, accounts receivable andaccounts payable when I sell?
A. Small businesses are usually sold with the seller retaining cash and accounts receivable, while accounts payable are paid by the seller.
Q. How is inventory handled?
A. A working level of inventory will usually conveyto the new owner at an agreed upon allocation. An inventory is taken immediately prior to closing, and any variances are adjusted for in the closing settlement amounts.
Q. What records do you need to prepare my business for sale?
A. The lack of properly maintained records isone of themore common reasons for anunsuccessfultransaction. It is hard to over emphasize the importance good books and records can make inachieving a successful business transfer. This includes financial statements, receipts and whatever is appropriate for your business. Of course, tax returns are a must.
Q. How far in advance should I start to prepare for the sale?
A. The sooner the better.Even if you are notsure if this is the right time to sell your business,a carefulanalysis of your company can often determine the most productive and cost effective changes you can make toprepare your business for a future sale if needed.
Q. Do I need an attorney or an accountant to sell my business?
A. While some businesses are sold without the help of attorneys and accountants, we always recommend that both seller and buyer engage professionals at the appropriate time.
Q.How are Business Intermediaries compensated? Are there any up-front costs?
A.Many business brokerage firms Success Fees arebased on a percentage of theselling price, and fees are earnedonly when business sells.
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Article Tags: Business Broker, Business Sales, Buying a Business, Mark Wood, pricing a business, sale of small business, selling a business online, Selling a Small Business, Small Business, value of small business, valuing a business, VMW Business Brokers
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About the Author: Mark Wood RSS for Mark's articles - Visit Mark's website Prior to founding VMW Business Brokers, Inc., Mark was a serial entrepreneur with over 20 years experience in small business ownership. He understands the motivations and concerns one has when it's time to sell or buy a business, as well as the need for experienced, professional representation. Mark serves as an active member of the International Business Brokers Association and the Mid-Atlantic Business Intermediaries Association and is a trained negotiator through Notre Dame's Mendoza College of Business. Mark can be reached at 703 992-6303 or mark@vmwbusinessbrokers.com Click here to visit Mark's website   Selling a Small Business in a Down Economy Selling a Small Business a Summary of the Process Top Ten Questions about Selling a Small Business |
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Blog pinging
- Thanks Martin - yes, I do ping and it has been very effective. I'm currently on the first page of Google for Mastermind Group and on the second page for Selling to Small Business.
My entry
- 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read
- this is a fascinating book about the history of Business theory, and I'd recommend it to anybody.
2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto.
3. PADI: The Business of Diving Book
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These maybe the coldest franchises out there:
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WORST FRANCHISE LOAN FAILURES Failure %
1 OBEE'S SOUP SALAD SUBS 55.56%
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Exclusive: Interview with Results
- Hi Forum Members,
I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles).
As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business.
This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business.
I am looking to interview about 30 businesses across North America over the span of 3 months.
At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews.
I would like to extend this opportunity to members of the Forum.
If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM.
Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
Re: Biz Plan Competition
- i just wanted to say that posting Small Business Events on CanadaOne is a great resource. Thanks Julie!
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