Selling a business is a top 5 decision in your life. Like deciding who to marry, picking your college major and selecting the surgeon to use for that health issue. Studies have shown that on average businesses sell for 20% more when the owner is represented by a business intermediary. I don’t know the exact number, but I’m confident that you have at least a 3X better chance of getting your business sold by seeking professional help. I hope the tips below will help you as you embark on this important life journey.
1. What is it really worth?
Properly valuing a business for sale is like looking at a diamond with a hundred facets. Most people will price a business’s worth in the marketplace too low or too high. Getting the price right will maximize the sell-ability of your company and ensure you don’t leave money on the table. The value is different to a financial buyer vs. a strategic buyer. The price is important, but the terms can have a huge influence on the total price paid. This is one of the most important decisions of your life don’t use a rule of thumb or hearsay on something this important.
2. Lack of Confidentiality
There are multiple reasons why confidentiality is important when selling a business. Key employees may become nervous about job security, clients may perceive that you are selling for negative reason, suppliers may become nervous about being paid, and the competition may sabotage you by putting a negative spin on it. Each person that inquires about your business will be required to comply with a strict Confidentiality and Non-Disclosure agreement ensure you of the utmost in privacy.
3. Nobody to market business
Selling a business is a full-time job that requires exceptional marketing, sales and negotiations skills. A professional intermediaries sole priority is to market your business confidentiality and effectively.
4. Lack of Transaction Expertise
The complexity of transactions can be challenging for even the most seasoned business owner. A business broker is a priceless partner help you avoid the pitfalls, increase the odds of success and manage the entire transaction process. TIP: Only work with a CBI (Certified Business Intermediary) to be sure you have the best and most professional representation.
5. Distraction from Running Your Business
It’s important that you continue to run your business as if you’ll own it for another 10 years. Allowing a business broker to sell your business, affords you with more time and energy to run your business at a time when the business should be at its very best.
6. Lack of Qualified Buyers
More important than finding an adequate buyer is finding enough qualified buyers that will be a suitable match with your unique industry and business. Never settle for the first buyer that walks off the street. You’ve invested many years building the company take the time to get professional advice and sell it for it’s full value.
7. Risk of Deal Pitfalls
As many as 40% of signed contracts for the sale of companies never reach the closing table. Emotions can cause second thoughts about selling or buying, due diligence, inadequate financing and overlooked legal issues could prevent a sale from going through.
8. It Takes too Long to Sell
A business broker has the proper experience, skills and knowledge to minimize the time required to sell your business. You only have one chance to set the proper price, roll out your marketing strategy and attract the best buyer. This is no time or place for a “do it yourself” with the bulk of your net worth at risk.
9. No Deal Structure Negotiation Expertise
There are many creative ways to structure a transaction to overcome an impasse and get the deal done. It’s also proven that buyers are more open during negotiation with a third party this allows you to understand the buyer’s objectives and craft a win/win business sale.
10. Lack of Objectivity
Most business owner will find it extremely challenging to remain objective when evaluating or dealing with matters concerning their business. A professional intermediary can be that buffer and sounding board that allows you to make wiser choices and negotiate a purchase agreement that makes you smile all the way to the bank.